Amazon acquires Roomba maker iRobot in $1.7 billion deal

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Amazon devices listen, watch, and will soon clean up after themselves.

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

The deal announced Friday is also a continuation of Amazon’s business strategy to expand market share in different product categories through acquisitions. It acquired Ring, which makes video doorbells and other smart home technology, in February 2018, and before that Blink, which makes connected cameras and doorbells for the home. It also shocked the grocery industry in 2017 when it announced the purchase of Whole Foods Market, a deal valued at $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 company’s healthcare ambitions. The alliance, one of its largest acquisitions, gives Amazon a physical network of healthcare practices and providers and bolsters its existing healthcare portfolio, which includes an online pharmacy and Amazon Care, a virtual urgent care service. and at home. Service.

Amazon’s $61 per share offer represents a 22 percent premium to Thursday’s closing price of $49.99. On Friday, iRobot shares rose nearly 19.1 percent to close at $59.54.

“We know that saving time is important, and tasks take up precious time that can be better spent doing something customers love,” said Dave Limp, senior vice president of Amazon Devices. “For many years, the iRobot team has proven its ability to reinvent the way people clean with products that are incredibly practical and inventive.”

Founded in 1990 by robotics specialists at the Massachusetts Institute of Technology, iRobot offers a variety of automatic vacuums and mops, as well as air purifiers and handheld vacuums. His signature Roomba, which retails for up to $1,000, learns the contours and corners of floors and can detect objects, offering connectivity to WiFi networks and smartphones and can be summoned by voice-activated smart home devices. The company was listed on the Nasdaq in 2005.

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

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

The company withdrew the 2022 financial forecast it issued in May and, citing “ongoing disruptions and uncertainty that could affect the company’s outlook,” suspended providing all other guidance on future performance.

iRobot’s products, which map out floor plans for its customers’ most intimate spaces, will add to Amazon’s suite of products that work by monitoring the home and the people inside it.

What started as a microphone on a speaker has become a growing genre of devices aimed at making home life more enjoyable. Last September, at the company’s annual fall press event, Amazon unveiled a 15-inch wall-mounted version of its Echo Show display that watches and listens to your home, and a host of other products and services that monitor your home. consumers in some way to anticipate their needs.

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

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

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

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

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