Amazon is Purchasing iRobot for $1.7 Billion
There has been a recent acquisition frenzy at Amazon.com. The maker of smart vacuum cleaners, iRobot, was acquired by the tech giant on Friday, making this acquisition its second in roughly the last two weeks. IRobot (IRBT) will be acquired for about $1.7 billion, including debt, in an all-cash transaction. The cost of the deal, which comes out to $61 per share, is a 22 percent premium over iRobot’s closing price on Thursday. iRobot developed the Roomba robotic vacuum, which made its debut in 2002. Customers of Roombas may now use voice instructions to clean their rooms by using Alexa, an Amazon virtual assistant.
The news sent iRobot share prices soaring; they rose by about 20% to $59.59 on Friday morning, after trading had been halted earlier. Amazon.com (AMZN) lost 0.8 percent of its value. Given the premium Amazon is paying for the acquisition, investors shouldn’t be shocked by the swing in the other direction. Amazon bought iRobot less than a month after buying the healthcare company One Medical for about $3.9 billion, including debt.
Amazon would now need to focus on regaining iRobot’s footing, which is already facing considerable difficulties. iRobot claimed on Friday that “unanticipated order reductions, delays, and cancellations from retailers” had a negative impact on its business. The second quarter’s revenue was reported at $255 million, which was less than the average estimate of $304 million. Additionally, the company disclosed that it would reduce operations and lay off 140 employees, or about 10% of its whole workforce.
A multinational company called iRobot specializes in building consumer robots and smart home products that make people’s lives better. The original Roomba robot vacuum was introduced by iRobot in 2002. iRobot has sold millions of robots worldwide as a multinational corporation today. Modern technology and concepts for cleaning, mapping, and navigation are included in the iRobot product line. Based on this portfolio, IRobot engineers are developing robots and smart home equipment to help customers make their homes easier to manage and healthier places to live.