As the e-commerce behemoth continues its foray into internet-connected household appliances and robotics, Amazon.com Inc. said that it will pay $1.65 billion to acquire iRobot Corp., the company that makes the Roomba vacuum. According to a statement released on Friday, Amazon will purchase the Bedford, Massachusetts-based business for $61 per share in cash. When compared to iRobot’s most recent closing price before to the announcement, the offer represented a 22 percent premium. IRobot’s CEO, Colin Angle, will stay in that position.
As part of its drive into connected products, Amazon has sought to make its Alexa speech assistant and Echo smart speakers the focal point. Roomba vacuums can already be managed by customers using Alexa. A portion of iRobot’s software is also operated on Amazon Web Services servers. Seattle-based Since a disastrous attempt at the smartphone market a few years ago, Amazon has made significant progress in the hardware sector. In an effort to establish itself at the forefront of the expanding market for smart home devices, it has conducted new product unveilings every year for the past few years.
Amazon may have an advantage over its own ideas because to iRobot, a well-known brand in the field of home cleaning appliances. Astro, a home robot introduced by Amazon last October, was meant to bring in—or at the very least, hint at—a future reminiscent of The Jetsons. The three-wheeled vehicle, known as the Astro, would eventually go for roughly $1,450. But despite its limited launch, Astro hasn’t generated much interest from customers.
As people who were confined to their houses searched out quick fixes to keep their homes tidy, iRobot reported an upsurge in sales during the epidemic. But like many other darlings of the epidemic period, demand for iRobot has fallen. On Friday, it revealed second-quarter sales of $255.4 million, below analysts’ forecast of $301 million. In a dispute over patent infringement involving JS Global Lifestyle Co.’s SharkNinja vacuums and hybrid vacuum-moppers, the firm has also been engaged in litigation. SharkNinja has undermined iRobot’s claim to be an American success story with a “passion for innovation” by using such ideas in its Chinese-made knockoffs.
The Roomba vacuum and Braava floor mops from iRobot, among other cutting-edge capabilities, “can map the floor of a house, recognise changes in the floor type being cleaned, spot clean, avoid obstructions and cliffs (such as stairs), and intelligently approach a base station to recharge.” Early Friday trading saw a little than 1% decline in Amazon shares. Shares of iRobot, which are down 24% for the year, increased by roughly 20%.
Although Amazon prefers to create its own technology, its devices division has been eager in recent years to make acquisitions that give the corporation a foothold in a competitive or nearby industry. With its purchase of Ring in 2018, Amazon gained a commanding position in the video doorbell market. The following year, it purchased WiFi hub manufacturer Eero.
Close observers of the business had hypothesised that increased scrutiny of Amazon’s dominance in the US and Europe may prompt the company to postpone major transactions. The firm appears to be conducting business as usual in light of Amazon’s announcement last month that it will acquire One Medical’s parent company 1Life Healthcare Inc. for $3.49 billion.
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