Amazon to buy iRobot, maker of Roomba vacuum cleaners

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A model Roomba robot vacuum is on display at iRobot’s headquarters in Bedford, Massachusetts

Scott Eells | Bloomberg | Getty Images

Amazon is acquiring iRobot for $61 per share in an all-cash deal that values ​​the Roomba maker at $1.7 billion, the companies announced Friday.

The deal will strengthen Amazon’s presence in consumer robotics. Amazon made a bold bet on the space last year when it unveiled the Astro Home Robot, a $1,500 device that’s equipped with the company’s Alexa digital assistant and can follow consumers around their homes. It has also launched a line of smart home devices, like Ring doorbells, as well as voice-activated thermometers and microwaves.

“For many years, the iRobot team has proven its ability to reinvent the way people clean with incredibly convenient and inventive products – cleaning when and where customers want it while avoiding common obstacles around the home. , to the automatic emptying of the collection bin,” Dave Limp, head of hardware peripherals at Amazon, said in a statement. “Customers love iRobot products – and I’m excited to work with the iRobot team to invent ways that make customers’ lives easier and more enjoyable.”

The acquisition marks Amazon’s fourth-biggest deal, behind its $13.7 billion purchase of grocery chain Whole Foods in 2017, its $8.45 billion purchase of MGM movie studio the last year and its $3.9 billion acquisition of primary care provider One Medical, announced last month.

iRobot, founded in 1990 by roboticists at the Massachusetts Institute of Technology, is best known for making the Roomba, a robot vacuum released in 2002 that can autonomously clean consumer floors. It also introduced robot mops and pool cleaners. iRobot also has a subscription program that offers automatic equipment replenishment, among other services.

Amazon is buying iRobot at a time when the robot maker is facing broad headwinds. The company released second-quarter results on Friday that showed a 30% annual decline in revenue, mainly due to “unexpected order reductions, delays and cancellations” from retailers in North America and Europe. , the Middle East and Africa.

iRobot became a pandemic darling in 2020 and 2021 as consumers spent more time at home and purchased robot vacuums to keep their homes clean. Its business has suffered from supply chain constraints in recent quarters. iRobot said it now had a glut of inventory amid “lower-than-expected” orders from retailers.

Second-quarter revenue was $255.4 million, well below the $303 million expected by analysts polled by Refinitiv. Its losses widened to 35 cents per share, adjusted. Analysts polled by Refinitiv had expected a loss of $1.55 per share.

iRobot said it will cut about 140 employees, or 10% of its workforce, as it faces rising costs and falling revenue.

iRobot CEO Colin Angle will continue to lead the company once the deal closes.

Shares of iRobot jumped more than 19% in early trading after being briefly halted after the deal was announced. Amazon’s stock fell more than 1%.

LOOK: Amazon to buy One Medical for about $3.9 billion

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