In a press release, Facebook revealed that the purchase includes $400 million in cash and 23.1 million shares, valued at $1.6 billion. The company also noted there's a provision for an additional $300 million earn-out in cash and stock based on certain milestones. Facebook said it expects to close the deal in the second quarter of this year.
Shares of Facebook were slightly lower in after-hours trading, off 0.51% to $64.56.
Oculus is best known for its' virtual reality headset, the Oculus Rift. "While the applications for virtual reality technology beyond gaming are in their nascent stages, several industries are already experimenting with the technology, and Facebook plans to extend Oculus' existing advantage in gaming to new verticals, including communications, media and entertainment, education and other areas," the company said in the release. "Given these broad potential applications, virtual reality technology is a strong candidate to emerge as the next social and communications platform."
"Mobile is the platform of today, and now we're also getting ready for the platforms of tomorrow," said Facebook founder and CEO, Mark Zuckerberg in the press release. "Oculus has the chance to create the most social platform ever, and change the way we work, play and communicate."
In a post to his Facebook account, Zuckerberg talked about the possibilities of the transaction, by bringing Oculus under Facebook's umbrella:
I'm excited to announce that we've agreed to acquire Oculus VR, the leader in virtual reality technology.