Amazon is buying iRobot for $61 a share in an all-cash deal that values the Roomba maker at $1.7 billion, the businesses introduced Friday.
The deal will deepen Amazon’s presence in client robotics. Amazon made a daring wager on the area final yr when it unveiled the Astro dwelling robotic, a $1,449.99 system that’s outfitted with the corporate’s Alexa digital assistant and might comply with 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 workforce has confirmed its capability to reinvent how folks clear with merchandise which are extremely sensible and creative — from cleansing when and the place clients need whereas avoiding widespread obstacles within the dwelling, to mechanically emptying the gathering bin,” stated Dave Limp, Amazon’s {hardware} units chief, in an announcement. “Clients love iRobot merchandise — and I’m excited to work with the iRobot workforce to invent in ways in which make clients’ lives simpler and extra pleasurable.”
The acquisition marks Amazon’s fourth-largest deal, behind its $13.7 billion buy of grocery chain Complete Meals in 2017, its $8.45 billion buy of movie studio MGM final yr, and its $3.9 billion acquisition of boutique primary-care supplier One Medical, introduced final month.
iRobot, based in 1990 by Massachusetts Institute of Expertise roboticists, is greatest recognized 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 gives computerized gear replenishment, amongst different companies.
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 yr earlier, primarily because of “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 purchased up robotic vacuums to maintain their properties clear. Its enterprise has suffered from provide chain constraints in latest quarters. iRobot stated 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, nicely in need of 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 stated it will reduce about 140 workers, 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 19% on Friday after they have been briefly halted following the announcement of the deal. Amazon’s inventory closed down 1%.
