For $285 million, GoPro sells Starman the majority of its shares

A little-known optical components manufacturer is acquiring GoPro for $285 million in cash. A deal that would allow the action-camera company to pay off its debt and gain more flexibility to manage rising memory chip prices and fierce competition from China.

Under the agreement announced Tuesday, GoPro is set to be acquired by Starman Optical, a privately held U.S. company that produces optical transceivers for artificial intelligence data centers. GoPro’s current shareholders would retain the remaining stake.

In a joint statement, the companies said the deal would enable consumer-focused GoPro to leverage its portfolio of more than 2,500 U.S. patents. Covering optical and imaging technologies—to gain access to commercial, defense, and AI markets.

Following the announcement, GoPro’s stock increased by more than 50%, closing at $1.33, over the offer price of $1.14 per share, which was a premium of almost 29.5% over its previous closing price. This may indicate that investors are expecting a larger offer.

GoPro shares have lost almost 96% of their value since the company’s first day of trading in 2014, when it was valued at $4 billion. This is due to the company’s recent struggles amid increased competition from Chinese rivals like DJI and Insta360.

From its peak of $633.91 million in the last three months of 2014, its revenue for the June quarter decreased by more than 80%.

A group of companies—including Allbirds, now known as Smartbird—has pivoted toward AI in recent months, drawn by an investment boom in the industry. Unlike some of them, GoPro will continue with its consumer business.

The company, which has approximately $92 million in outstanding debt. Will also remain publicly traded following the close of the deal, expected by the end of the year.