- Amazon is acquiring iRobot for $61 per share in an all-cash deal valued at $1.7 billion, the firms said Friday.
- iRobot, best known for its robotic vacuum Roomba, has subsequently expanded its product range to include additional household cleaning robots such as mops and lawn mowers.
- Amazon’s acquisition of iRobot will help it to extend its device line, making it more competitive in its quest to become the leading smart home platform.
Roomba, the popular cleaning robot best known for its robotic vacuum, will be an Amazon.com Inc. product. The e-commerce behemoth announced Friday that it has agreed to purchase Roomba producer iRobot Corp in an all-cash deal for around $1.7 billion, including iRobot’s net debt.
Amazon has agreed to buy consumer robot manufacturer iRobot for $61/share in an all-cash deal worth $1.7 billion, including iRobot’s net debt.
The transaction is subject to customary closing conditions, including shareholder approval and regulatory clearances from iRobot (IRBT). Colin Angle will continue to manage iRobot as CEO when the transaction is completed.
The agreement expands Amazon’s footprint in consumer robotics. Amazon made a big bet on space last year when it introduced the Astro home robot, a $1,449.99 gadget that comes with Amazon’s Alexa digital assistant and can follow customers around their houses. It also sells smart home gadgets like as linked doorbells, which it acquired in 2018, as well as voice-activated thermometers and microwaves.
iRobot has suffered with supply chain challenges and China tariffs.
The firm has been attempting to distinguish itself from other cleaning robot manufacturers by improving the intelligence of its robots and allowing consumers to customise the cleaning process of their houses. Integration of iRobot’s robots with Amazon’s voice-controlled virtual assistant Alexa might help Amazon realise its vision of the smart home.
As part of the acquisition, iRobot stated that it intends to implement cost-cutting measures, including the layoff of around 140 people, or 10% of the company’s worldwide workforce. The firm employs around 1,370 full-time workers, with 30% situated outside of the United States.
A spokeswoman for iRobot declined to comment on the layoffs, including their impact on the company’s Massachusetts staff. iRobot stated in public documents that “some non-core engineering tasks” will be relocated to lower-cost locations.
Amazon is well-known for making risky purchases in areas that might help it improve its logistics and delivery operations. It negotiated a contract with primary care company One Medical in late July to increase its influence in the health care market. And the iRobot acquisition comes four years after Amazon paid about $1 billion in cash for the Boston-area online drugstore PillPack.
The iRobot acquisition is not Amazon’s first effort into the thriving robotics business in the greater Boston region. Amazon Robotics was established on the foundation of North Reading-based Kiva Systems, which was bought by Amazon for $775 million in 2012.
Amazon has pushed a portfolio of gadgets under an ecosystem that links users more intimately to the corporation and its services, ranging from fitness trackers to streaming devices to its Alexa personal assistant. It debuted Astro, a $1,000-plus robot designed to transport small goods while keeping its cameras alert for intruders, last year.
The agreement announced on Friday is also a continuation of Amazon’s business strategy of acquiring market share in several product categories.
In February 2018, it acquired Ring, which develops video doorbells and other smart-home equipment, and before that Blink, which makes linked cameras and doorbells for the house. It also startled the supermarket business in 2017 when it announced the $13.7 billion purchase of Whole Foods Market.
The decision comes only two weeks after Amazon announced a $3.9 billion acquisition of primary care provider One Medical as part of a major expansion of the tech company’s health-care aspirations. The acquisition, one of Amazon’s largest ever, provides the company with a physical network of health-care locations and doctors, as well as expanding its existing health-care portfolio, which includes an online pharmacy and Amazon Care, a virtual and in-home urgent care service.
Amazon’s offer of $61 per share marks a 22% premium over Thursday’s closing price of $49.99. On Friday, iRobot shares rose approximately 19.1 percent to $59.54.
iRobot, founded in 1990 by roboticists from the Massachusetts Institute of Technology, provides a variety of automated vacuums and mops, as well as air purifiers and portable vacuums. Its iconic Roomba, which may cost up to $1,000, learns the curves and corners of floors, detects items, connects to WiFi networks and cellphones, and can be called by voice-activated smart home devices. In 2005, the firm began trading on the Nasdaq.
iRobot is a company that focuses in robotics and intelligent home improvements. Its product offering includes cleaning technologies and sophisticated concepts, as well as mapping and navigation. Despite becoming a household name in home robotics, iRobot has had a difficult year.
“Over many years, the iRobot team has proven its ability to reinvent how people clean with products that are incredibly practical and inventive — from cleaning when and where customers want while avoiding common obstacles in the home, to automatically emptying the collection bin,” Dave Limp, senior vice president of Amazon Devices, said in a statement.
Shares of iRobot surged 19% on Friday after they were briefly halted following the announcement of the deal. Amazon’s stock closed down 1%.
It recorded second-quarter sales of $255.4 million, a 30% decrease from the previous year. For the three months ending July 2, it posted a net loss of $43.4 million.
According to the earnings report, the business also expects to relocate certain non-core engineering tasks to lower-cost countries as part of a cost-cutting strategy, as well as lay off 10% of its personnel, or around 140 individuals.
The corporation has retracted its 2022 financial prediction, citing “ongoing disruptions and uncertainty that might damage the company’s outlook,” and has ceased releasing any additional future performance advice.