The firms announced on Friday that Amazon will buy iRobot for $61 per share in an all-cash deal that values the maker of the Roomba at $1.7 billion.
iRobot, which is best known for its robotic vacuum Roomba, has subsequently expanded its product line to include other robotic cleaners for the house, including mops and lawn mowers.
The firms announced on Friday that Amazon will buy iRobot for $61 per share in an all-cash deal that values the maker of the Roomba at $1.7 billion.
The agreement will strengthen Amazon’s position in consumer robotics. When it debuted the $1,449.99 Astro home robot last year, Amazon put a big bet on the market. The device has Alexa built in and can follow users about their homes. After acquiring Ring in 2018, it also offers a large selection of connected doorbells, voice-activated thermometers, and other smart home equipment.
According to Dave Limp, head of hardware devices at Amazon, “the iRobot team has proved its capacity to revolutionise how people clean with products that are incredibly practical and imaginative over many years.” From automatically emptying the trash can to cleaning when and where consumers desire while avoiding common impediments in the home. I’m excited to work with the firm to create new technologies that will enhance and simplify the lives of customers who appreciate iRobot products.
The purchase ranks as Amazon’s fourth-largest transaction, trailing only its $13.7 billion acquisition of grocery chain Whole Foods in 2017, $8.45 billion acquisition of movie studio MGM in 2018, and its $3.9 billion announcement last month of its acquisition of boutique primary-care provider One Medical.
Robotics experts at the Massachusetts Institute of Technology founded iRobot in 1990. It is best known for creating the Roomba, an autonomous robotic vacuum introduced to consumers in 2002. Additionally, robotic pool cleaners and mops have been introduced. In addition to other services, iRobot’s membership programme provides automatic equipment replenishment.
Amazon is purchasing iRobot at a time when the maker of robots is experiencing significant challenges. Due mostly to “unanticipated order reductions, delays, and cancellations” from retailers in North America and Europe, the Middle East, and Africa, the company’s second-quarter results revealed a 30 percent fall in revenue from a year earlier.
In 2020 and 2021, as people spent more time at home and flocked to robot vacuums to keep their houses tidy, iRobot rose to become a Covid pandemic favourite. Constraints in the company’s supply chain have recently hurt business. Due to “lower-than-expected” purchases from retailers, iRobot claimed it currently has an excess of inventory.
The second quarter’s revenue of $255.4 million fell far short of the $303 million analysts surveyed by Refinitiv had predicted. Its adjusted losses per share increased to 35 cents. Refinitiv’s analysts had predicted a loss of $1.55 per share.
iRobot announced it would lay off 140 workers, or 10% of its workforce, due to growing expenses and declining sales.
Colin Angle, the current CEO of iRobot, will remain in that position following the transaction.
Both regulators and the shareholders of iRobot must approve the transaction.
Following a brief halt following the announcement of the purchase, shares of iRobot rose 19 percent on Friday. Amazon’s stock ended the day down 1%.
