Amazon.com, Inc (NASDAQ: AMZN) has announced plans to buy iRobot for $61 per share in an all-cash transaction valuing the Romba manufacturer at around $1.7 billion.
Amazon to buy iRobot as it bets on the robotics sector
The agreement will strengthen Amazon’s position in consumer robotics. When it debuted the $1,449.99 Astro home robot in 2021, Amazon put a big bet on the market. The device has Alexa built in and can follow users about their homes. Additionally, it provides a wide range of smart home appliances, including thermometers and voice-activated microwaves, in addition to interconnected doorbells after purchasing Ring in 2018.
Amazon’s hardware devices head Dave Limp stated, “Over many years, the iRobot team has proven its ability to reinvent how people clean with products that are incredibly practical and inventive — from cleaning when and where customers want while avoiding common obstacles in the home, to automatically emptying the collection bin.”
The purchase ranks as Amazon’s 4th largest transaction, trailing only its $13.7 billion acquisition of grocery store chain Whole Foods in 2017, the $8.45 billion purchase of movie studio MGM in 2018, and the $3.9 billion announcement last month of its purchase of boutique primary-care firm One Medical.
Robotics experts at the Massachusetts Institute of Technology established iRobot in 1990. It is known primarily for creating the Roomba, an industrial robot vacuum introduced to users in 2002. Additionally, robotic pool cleaners and mops have been introduced. In addition to other services, iRobot’s membership program provides automatic equipment replacement.
iRobot’s revenue dropped 30% in Q2
Amazon is purchasing iRobot at such a moment when the maker of robots is experiencing significant challenges. Due mostly to “unanticipated order cutbacks, cancellations, and delays from retailers in North America and Europe, the Middle East, and Africa, the company’s second-quarter results revealed a 30 percent fall in revenue from a year earlier.
In 2020 and 2021, as people spent at home and flocked to robot vacuums to maintain their houses tidy, iRobot rose to become a Covid pandemic favorite.
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