The deal announced on Friday is also a continuation of Amazon’s business strategy to grow market share in different product categories through acquisitions. It bought Ring, which makes video doorbells and other smart home technology, in February 2018, and before that Blink, which makes smart home cameras and doorbells. He also stunned the grocery industry in 2017 when he announced the purchase of Whole Foods Market, a deal valued at $13.7 billion.
(Amazon founder Jeff Bezos owns The Washington Post.)
The move comes just two weeks after Amazon announced it would buy primary care provider One Medical for $3.9 billion in a major expansion of the tech company’s healthcare ambitions. health. The combination, one of its largest acquisitions ever, gives Amazon a physical network of offices and healthcare providers and strengthens its existing healthcare portfolio, which includes an online pharmacy and Amazon Care, a virtual and home-based urgent care center. service.
Amazon’s offer of $61 per share represents a 22% premium to Thursday’s closing price of $49.99. On Friday, iRobot stock jumped nearly 19.1% to close at $59.54.
“We know saving time is important, and household chores take up valuable 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 incredibly practical and inventive products.”
Founded in 1990 by roboticists at the Massachusetts Institute of Technology, iRobot offers a line of automated vacuums and mops, as well as air purifiers and handheld vacuums. Its signature Roomba, which sells 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 started trading on the Nasdaq in 2005.
Although a big name in home robotics, iRobot has had a turbulent year. On Friday, it reported second-quarter revenue of $255.4 million, down 30% from a year earlier. It reported a net loss of $43.4 million for the three months ended July 2.
The company also plans to shift some non-essential engineering roles to lower-cost regions as part of a cost-cutting plan, and lay off 10% of its workforce, or about 140 employees, according to the report. results.
The company withdrew the 2022 financial guidance it issued in May and, citing “ongoing disruptions and uncertainties that could impact the company’s outlook”, it suspended further guidance on future performance. .
iRobot’s products, which map out floor plans of its customers’ most intimate spaces, will complement Amazon’s suite of products that work by monitoring the home and the people in it.
What started as a microphone in a speaker has become a growing genre of devices meant to make home life more enjoyable. Last September, at the company’s annual press event, Amazon unveiled a 15-inch wall-mounted version of its Echo Show display that watches and listens to your home, along with a number of other products and services. who monitor all consumers in one way or another to anticipate their needs.
The growth of this technology highlights consumers’ growing tolerance for sensors and cameras trained in their daily routines. This development has drawn criticism from privacy advocates and concerned consumers. It also highlights how tech giants see the home as just another platform for a range of services and a gold mine 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 iRobot’s general manager.
Amazon shares 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 reported its second straight quarterly loss — of $2.03 billion, or 20 cents per share — due to a $3.9 billion writedown related to its investment in the electric vehicle start-up Rivian Automotive, the Associated Press reported. . But Amazon also posted better-than-expected revenue of $121.2 billion in the second quarter.
