Amazon to acquire maker of Roomba vacuums for roughly $1.7 billion

On this article

Amazon is buying iRobot for $61 a share in an all-cash deal that values the Roomba maker at $1.7 billion, the businesses announced Friday.

The deal will deepen Amazon’s presence in shopper robotics. Amazon made a daring guess on the house final 12 months when it unveiled the Astro dwelling robotic, a $1,449.99 machine that is geared up with the corporate’s Alexa digital assistant and might observe shoppers round their properties. It additionally gives an array of sensible dwelling units, like linked doorbells after its 2018 acquisition of Ring, in addition to voice-activated thermometers and microwaves.

“Over a few years, the iRobot group has confirmed its means to reinvent how folks clear with merchandise which might be extremely sensible and creative — from cleansing when and the place prospects need whereas avoiding frequent obstacles within the dwelling, to mechanically emptying the gathering bin,” mentioned Dave Limp, Amazon’s {hardware} units chief, in an announcement. “Prospects love iRobot merchandise — and I am excited to work with the iRobot group to invent in ways in which make prospects’ lives simpler and extra pleasurable.”

The acquisition marks Amazon’s fourth-largest deal, behind its $13.7 billion purchase of grocery chain Complete Meals in 2017, its $8.45 billion purchase of movie studio MGM final 12 months, and its $3.9 billion acquisition of boutique primary-care supplier One Medical, introduced final month.

iRobot, based in 1990 by Massachusetts Institute of Know-how roboticists, is greatest identified for making the Roomba, a robotic vacuum launched in 2002 that may clear shoppers’ flooring autonomously. It has additionally launched robotic mops and pool cleaners. iRobot additionally has a subscription program that provides automated gear replenishment, amongst different providers.

A vacuuming Roomba mannequin robotic is displayed at iRobot headquarters in Bedford, Massachusetts
Scott Eells | Bloomberg | Getty Pictures

Amazon is shopping for iRobot at a time when the robotic maker is going through broad headwinds. The corporate reported second-quarter outcomes on Friday that confirmed a 30% decline in income from a 12 months earlier, primarily attributable to “unanticipated order reductions, delays and cancellations” from retailers in North America and Europe, the Center East and Africa.

iRobot turned a Covid pandemic darling in 2020 and 2021 as shoppers spent extra time at dwelling and acquired up robotic vacuums to maintain their properties clear. Its enterprise has suffered from provide chain constraints in latest quarters. iRobot mentioned it now has a glut of stock amid “lower-than-expected” orders from retailers.

Income for the second quarter got here in at $255.4 million, effectively wanting the $303 million anticipated by analysts surveyed by Refinitiv. Its losses widened to 35 cents per share, adjusted. Analysts surveyed by Refinitiv had anticipated a lack of $1.55 per share.

iRobot mentioned it will minimize about 140 staff, or 10% of its workforce because it faces rising prices and falling income.

iRobot CEO Colin Angle will proceed to run the corporate as soon as the deal closes.

The deal will want the approval of regulators and iRobot’s shareholders.

Shares of iRobot surged greater than 19% in early buying and selling after they have been briefly halted following the announcement of the deal. Amazon’s inventory was down lower than 1%.

Correction: Amazon acquired Ring in 2018. An earlier model misstated its standing.

WATCH: Amazon to acquire One Medical for roughly $3.9 billion


Leave a Reply

Your email address will not be published. Required fields are marked *