Amazon acquires Roomba maker iRobot in a $ 1.7 billion deal

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Amazon devices are listening, watching, and will soon clean up after you.

The e-commerce giant will acquire iRobot, best known for its Roomba robot vacuum, in a $ 1.7 billion all-cash deal, the latest step in its push home. From fitness wearables to streaming devices to its Alexa digital assistant, Amazon has advanced a range of devices in an ecosystem that ties consumers more closely to the company and its services. Last year it introduced Astro, a $ 1,000 plus robot designed to carry small items and keep its cameras open for intruders.

The deal announced on Friday is also a continuation of Amazon’s corporate strategy to expand market share across multiple product categories through acquisitions. In February 2018, it purchased Ring, which makes video doorbells and other smart home technologies, and before that Blink, which makes connected cameras and doorbells for the home. It also stunned the food industry in 2017 when it announced the purchase of Whole Foods Market, a deal worth $ 13.7 billion.

(Amazon founder Jeff Bezos owns the Washington Post.)

The next generation of home robots will be more capable and perhaps more social

The move comes just two weeks after Amazon announced it would buy primary care provider One Medical for $ 3.9 billion as part of a major expansion of the tech firm’s healthcare ambitions. The bond, one of its largest acquisitions ever, offers Amazon a physical network of offices and health care providers and strengthens its existing health care portfolio, which includes an online pharmacy and Amazon Care, a virtual urgent care and home care service. .

Amazon’s $ 61 per share offering represents a 22% premium over Thursday’s closing price of $ 49.99. On Friday, iRobot stock was up nearly 19.1% to close at $ 59.54.

“We know that saving time is important and housework requires valuable time that can be better spent doing something customers love,” said Dave Limp, senior vice president of Amazon Devices. “Over the course of many years, the iRobot team has demonstrated their ability to reinvent the way people clean with incredibly practical and imaginative products.”

Founded in 1990 by roboticists at the Massachusetts Institute of Technology, iRobot offers a range of automated vacuum cleaners and mops, as well as air purifiers and handheld vacuum cleaners. Its signature Roomba, which costs up to $ 1,000, learns the contours and angles of floors and can detect objects, offering connectivity to Wi-Fi networks and smartphones, and can be called up by voice-activated smart home devices. The company began operating on the Nasdaq in 2005.

Although a prominent name in home robotics, iRobot has had a tough year. On Friday, it reported second quarter revenue of $ 255.4 million, a 30% drop from the period a year ago. It recorded a net loss of $ 43.4 million for the three-month period ending July 2.

The company also plans to shift some non-core engineering roles to low-cost regions as part of a cost-cutting plan and lay off 10 percent of its workforce, approximately 140 employees, according to the earnings report.

The company withdrew its financial forecasts for 2022 issued in May and, citing “the continuing disruptions and uncertainties that could affect the company’s prospects,” suspended all other indications on future performance.

IRobot’s products, which trace floor plans of its customers’ most intimate spaces, will augment Amazon’s suite of products that work by guarding the home and the people inside.

What started as a microphone in a speaker has evolved into a growing genre of devices intended to make home life more enjoyable. At the company’s annual fall press event last September, Amazon unveiled a 15-inch version of its Echo Show wall-mounted screen that looks and listens to your home and a number of other products and services that all monitor consumers in. some way to anticipate their needs.

The growth of such technology highlights consumers’ growing tolerance of sensors and cameras trained in their daily routines. This evolution has drawn criticism from privacy advocates and concerned consumers. It also points out how tech giants see the home as another platform for a range of services and a goldmine of personal data.

Amazon will acquire iRobot’s net debt under the terms of the agreement, which will require approval from regulators and shareholders of the robot manufacturer. Colin Angle will remain as CEO of iRobot.

Shares of Amazon fell 1.2% on Friday to close at $ 140.80, giving it a market value of $ 1.4 trillion.

Last week, the Seattle-based giant posted its second consecutive quarterly loss – of $ 2.03 billion, or 20 cents per share – driven by a $ 3.9 billion devaluation linked to its investment in the startup. -up of Rivian Automotive electric vehicles, the Associated Press reported. But Amazon also posted better-than-expected revenue of $ 121.2 billion during the second quarter.

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