Technology · August 5, 2022

Amazon acquires iRobot, maker of Roomba vacuum cleaners

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

The deal will deepen Amazon’s presence in consumer robotics. Amazon made a bold bet on space last year when it introduced the Astro home robot, a $1,449.99 device equipped with the company’s digital assistant Alexa that can follow consumers around their homes. It also offers a range of smart home devices, like connected doorbells following its 2018 acquisition of Ring, as well as voice-activated thermometers and microwaves.

“Over many years, the iRobot team has demonstrated their ability to reinvent the way people clean with incredibly practical and inventive products – from cleaning when and where customers want while removing common obstacles in the home household, right down to automatically emptying the collection bin,” said Dave Limp, Amazon’s chief hardware officer, in a statement. “Customers love iRobot products – and I look forward to working with the iRobot team to find ways to make customers’ lives easier and more enjoyable.”

The acquisition is Amazon’s fourth-biggest deal, after its $13.7 billion purchase of grocery chain Whole Foods announced last month.

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

A Roomba vacuuming robot is on display at the iRobot headquarters in Bedford, Massachusetts

Scott Eells | Bloomberg | Getty Images

Amazon buys iRobot at a time when the robot maker is facing severe headwinds. The company on Friday reported second-quarter results that showed a 30% year-over-year decline in sales, largely due to “unexpected order cuts, delays and cancellations” from retailers in North America and Europe, the Middle East and Africa.

iRobot became a darling of the Covid pandemic in 2020 and 2021 as consumers spent more time at home and bought robot vacuum cleaners to keep their homes clean. The business has suffered from supply chain constraints in recent quarters. iRobot said it now has an abundance of inventory amid “fewer than expected” orders from retailers.

Revenue for the second quarter was $255.4 million, well below the $303 million expected by analysts polled by Refinitiv. Adjusted losses rose to 35 cents a share. 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.

Colin Angle, CEO of iRobot, will continue to lead the company after the transaction closes.

The deal is subject to regulatory and iRobot shareholder approval.

Shares of iRobot are up more than 19% in early trade after being briefly halted following the deal announcement. Amazon stock lost less than 1%.

Correction: Amazon acquired Ring in 2018. In a previous version, the status was incorrectly reported.

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