According to a Friday announcement from the two businesses, Amazon will buy iRobot for $61 per share in an all-cash deal, valuing the maker of the Roomba at $1.7 billion.
The agreement will increase Amazon’s market share in consumer robotics. When it debuted the $1,449.99 Astro home robot last year, Amazon took a big bet on the market. The device can follow users about their homes and is outfitted with the company’s Alexa digital assistant.
Along with voice-activated thermometers and microwaves, it also provides a wide range of smart home appliances, including connected doorbells following its 2018 acquisition of Ring.
In a statement, Dave Limp, Amazon’s hardware devices chief, said: “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.”
Customers adore iRobot products, and I’m eager to collaborate with the team to develop ideas that will make their lives easier and more pleasurable.
The purchase ranks as Amazon’s fourth-largest transaction, behind its $3.9 billion acquisition of boutique primary-care provider One Medical announced last month and its $3.9 billion purchases of movie studio MGM and grocery chain Whole Foods, each of which cost $13.7 billion.
The Roomba robotic vacuum, introduced in 2002 and created by iRobot, a company formed in 1990 by roboticists from the Massachusetts Institute of Technology, is the company’s best-known product.
Additionally, it has pool cleaners and robotic mops. Additionally, iRobot has a membership program that, among other features, provides automatic equipment replenishment.
At a time when the producer of robots is experiencing significant challenges, Amazon is purchasing iRobot.
A 30 percent drop in sales from a year ago was revealed in the company’s second-quarter results, which were released on Friday. This decline was mostly brought on by “unanticipated order reductions, delays, and cancellations” from merchants in North America, Europe, the Middle East, and Africa.
As people spent more time at home in 2020 and 2021 and purchased more robot vacuums to keep their houses tidy, iRobot rose to fame as the Covid pandemic’s darling.
Recent quarters have seen the business suffer from supply chain problems. In light of “lower-than-expected” orders from retailers, iRobot claimed to have an excess of inventory at the moment.
The second quarter’s revenue of $255.4 million was considerably less than the $303 million that Refinitiv’s survey of analysts had predicted. Its adjusted losses increased to 35 cents per share. Refinitiv’s survey of analysts found that they had projected a loss of $1.55 per share.
Due to growing expenses and declining revenue, iRobot announced it would lay off around 140 workers, or 10% of its staff.
After the purchase is completed, iRobot CEO Colin Angle will remain in that position.
Investors of iRobot as well as regulatory authorities must approve the transaction.
After being temporarily stopped after the news of the purchase, shares of iRobot soared 19 percent on Friday. The price of Amazon’s stock decreased by 1%.