Digital health and fitness-tracking company Fitbit has just officially announced that it is buying key assets from smartwatch startup Pebble, after reports emerged last week that a deal between the two was close to being completed.

Fitbit co-founder and CEO James Park said in a release that the company “sees an opportunity to build on our strengths and extend our leadership position in the wearables category.”

“With this acquisition, we’re well positioned to accelerate the expansion of our platform and ecosystem to make Fitbit a vital part of daily life for a wider set of consumers,” Park continued. The deal was closed yesterday, December 6th.

According to a report yesterday from Bloomberg, Fitbit bought Pebble for less than $40 million, and has offered jobs mostly to software engineers at Pebble. Pebble founder and CEO Eric Migicovsky will not be staying on with Fitbit after the acquisition.

The acquisition is largely a grab for Pebble’s software assets and smartwatch platform, and comes at a time when the consumer wearables industry is showing serious signs of weakness. Fitbit itself said it a recent third-quarter earnings call that it is seeing signs of softening in the market, and lowered its forecast for the usually critical holiday quarter. Tech companies like Motorola, LG, and Huawei have declined to release new smartwatches this fall; while Microsoft is no longer selling its health-tracking Band.

And, while Apple has said that the Apple Watch just had its best week ever in terms of sales, new numbers from global research firm IDC suggest that shipments of Apple Watch were actually down more than 70 percent year over year.

IDC: “Smartwatches will continue to struggle in the near term.”

The IDC report also says that “smartwatches will continue to struggle in the near term,” but that clearly hasn’t deterred Fitbit from buying up one of the smartwatch companies that it could.

Based in Redwood City, California, Pebble first launched back in 2012 on Kickstarter and gained fame for being a wildly successful crowdfunded project. Its open-sourced, utilitarian smartwatches, with their “e-paper” displays and relatively long battery life, won over the early tech adopter crowd, as well as app developers who wanted to build apps for Pebble.

More recently, the company announced the Pebble 2 and Pebble Time 2, successors to its earlier watches, along with the Core, a pocketable, display-free wearable that was supposed to offer GPS tracking and offline music listening. And Pebble had focused more and more on health and fitness tracking in its recent product launches.

But Pebble has been struggling to stay afloat financially for the past year, according to three sources, and the new Pebble Time 2 had been delayed. In a statement released on its website this morning, Pebble said that it is “no longer able to operate as an independent entity” and that it had made the difficult decision to shut down the company. It will no longer make hardware. Its newest products, the Pebble Time 2 and Core, are canceled, with refunds expected to go out to Kickstarter backers in the next four to eight weeks.

Existing Pebble smartwatches will continue to work, the company said, but functionality will be reduced in the future due to a lack of support.