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Amazon to acquire robot vacuum maker iRobot for $1.7B - SiliconANGLE

[siliconangle.com]1 week ago

Amazon.com Inc. today announced plans to acquire robot vacuum maker iRobot Corp. for $1.7 billion.

The transaction values publicly traded iRobot at $61 per share. The robotics company’s shares, which are traded on the Nasdaq, closed at $49.99 on Wednesday.

Bedford, Massachusetts-based iRobot develops the popular Roomba series of robot vacuums. The company launched the product line in 2002 and has since sold more than 40 million units. The Roomba series competes in a market that also includes rival products from multiple other manufacturers including Samsung Electronics Co. Ltd.

To address the growing competition, iRobot has been equipping its robot vacuums with increasingly sophisticated features. The company’s newest system, the Roomba j7+, includes a software platform dubbed iRobot OS that enables users to specify in advance which rooms the robot should clean and when. The Roomba j7+ can furthermore automatically detect and avoid obstacles.

“Since we started iRobot, our team has been on a mission to create innovative, practical products that make customers’ lives easier, leading to inventions like the Roomba and iRobot OS,” said iRobot chief executive officer Colin Angle. “Amazon shares our passion for building thoughtful innovations that empower people to do more at home, and I cannot think of a better place for our team to continue our mission.”

The acquisition of iRobot will buy Amazon not only a popular robot vacuum line but also several other products. Alongside the Roomba series, iRobot offers educational robots that are used to teach programming skills and a line of handheld vacuums. Additionally, the company moved into the residential air purifier market last year through the purchase of Switzerland-based electronics maker Aeris Cleantec AG.

In conjunction with the news that it has agreed to be acquired by Amazon, iRobot today released its second quarter financial results. The company’s revenue declined from $365.6 million in the second quarter of 2021 to $255.4 million in the three months ended July 2. It attributed the revenue drop primarily to reduced demand from retailers.

The slowed demand experienced by iRobot may have helped Amazon acquire the company at a more favorable price point than would have been possible a few months ago. Shares of iRobot’s stock closed at $49.99 on Wednesday, down from $68 at the start of the year.

The acquisition is poised to establish Amazon as one of the leading players in the home robotics market. Amazon already competes in that market with the Astro, an Alexa-equipped residential robot introduced last year. Astro can perform a variety of tasks including moving small items between rooms.

The technology that Amazon is set to obtain as part of the iRobot acquisition will also enhance its broader smart home portfolio. The company’s smart home portfolio includes numerous products ranging from thermostats to doorbells. Some of those products are based on another acquisition, the $1-billion-plus purchase of Ring Inc. that Amazon announced in 2018.

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

Amazon uses robots extensively in its fulfillment centers to process e-commerce purchases. The company develops both its robots and the software used to power them in-house. After the acquisition of iRobot closes, Amazon could potentially draw on its technical expertise  to help enhance the Roomba product lineup’s capabilities.

It’s also possible that the company will invest in expanding the Roomba lineup with additional products. After Amazon acquired  Ring in 2018, it introduced multiple new devices under the Ring brand. Moreover, the company has integrated Ring devices with several of its other smart home products, an approach that it could potentially take with the Roomba product line as well. 

https://siliconangle.com/2022/08/05/amazon-acquire-robot-vacuum-maker-irobot-1-7b/

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