Walmart says it has finalized its $2.3 billion acquisition of smart television maker Vizio, a move that is intended to help the retail giant further its connected TV advertising and data collection businesses.
The acquisition was finalized on Tuesday, months after officials at the Federal Trade Commission said they wanted more information about the merger. Walmart said the request was expected, and was moving forward with the acquisition; reports last month indicated the merger was expected to be completed between late November and early December.
In a statement on Tuesday, Walmart said the acquisition of Vizio and its smart TV operating system, called SmartCast, is intended to help the retailer “serve its customers in new ways to enhance their shopping journeys” and “bring to market new and differentiated ways for advertisers to meaningfully connect with customers at scale and boost product discovery, helping brands achieve greater impact from their advertising investments with Walmart Connect,” the name of the company’s retail advertising and media business in the United States.
“Vizio offers great products at great prices that customers love. They’ve always put customers at the center of their business, and that’s core to Walmart’s values and the omnichannel experiences we’re excited to roll out,” Seth Dallaire, the EVP and Chief Growth Officer at Walmart U.S., said in a statement. “Vizio has also expertly changed their business over time, like building and quickly scaling a profitable advertising business. Pairing it with Walmart Connect will be impactful and allow us to invest in our business even further on behalf of our customers.”
Based in California, Vizio started in the early 2000s with a mission of building feature-filled, high-definition television sets that were priced attractively compared to similar offerings from Sony, Samsung, LG and Panasonic. The company was put on a fast track to success after Costco agreed to sell some models of Vizio TVs in its warehouses across the country, giving the Vizio brand an instant reputation of quality and reliability among consumers.
Over the past few years, Vizio has focused less on hardware sales and more on building out SmartCast and its related platform businesses. Vizio counts more than 19 million users of its smart TV operating system, which offers hundreds of free, ad-supported streaming TV channels and access to premium Internet-based services like Netflix, Prime Video, Disney Plus and YouTube right out of the box.
Walmart’s interest in Vizio came at a time when the company’s platform revenue was on track to eclipse its hardware sales: While sales of Vizio’s smart TVs and soundbars still account for a decent chunk of its revenue, connected TV advertising and subscription sales were starting to outpace it, something that caught the eye of the retail giant as it moves forward with its own retail media strategies.
“Since the inception of Vizio, our mission has been to provide incredible value, great technology, and award-winning innovation,” William Wang, the founder and CEO of Vizio, said on Tuesday. “Today, with the tremendous number of resources from Walmart, we will continue to further accelerate that mission around the best home entertainment experience.”
During the third quarter (Q3) of the year, Vizio said it earned $197 million in platform revenue, accounting for nearly one-third of the $445 million in net income for the period. Its gross profit clocked in at $115.8 million, and its average revenue per user (ARPU) climbed 18 percent to $37.17.
The average Vizio user streamed 101 hours of content through the SmartCast platform each month during Q3, the company said in its financial report last month. In addition to its connected TV advertising business, Vizio also sells viewership data and related metrics to third parties.
