The deal announced Friday also is a continuation of Amazon’s business strategy to expand market share in different product categories through acquisitions. It snapped up Ring, which makes video doorbells and other smart-home technology, in February 2018, and before that Blink, which makes connected cameras and doorbells for the home. It also stunned the grocery industry in 2017 when it announced the purchase of Whole Foods Market, a deal valued at $13.7 billion.
(Amazon founder Jeff Bezos owns The Washington Post.)
The next generation of home robots will be more capable — and perhaps more social
The move comes just two weeks after Amazon announced it would buy the primary care provider One Medical for $3.9 billion as part of a major expansion of the tech company’s health-care ambitions. The tie-up, one of its largest acquisitions ever, gives Amazon a physical pharmacy network of health-care offices and providers and bolsters its existing health-care portfolio, which includes an online and Amazon Care, a virtual and in-home urgent care service.
Amazon’s $61-a-share offer represents a 22 percent premium over Thursday’s closing price of $49.99. On Friday, iRobot stock surged nearly 19.1 percent to close at $59.54.
“We know that saving time matters, and chores take precious time that can be better spent doing something that customers love,” said Dave Limp, 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.”
Founded in 1990 by roboticists from the Massachusetts Institute of Technology, iRobot offers an array of automated vacuums and mops, as well as air purifiers and handheld vacuums. Its signature Roomba, which retails for as much as $1,000, learns the contours and corners of floors and can detect objects, offering connectivity to WiFi-networks and smartphones and can be summoned by voice-activated smart home devices. The company began trading on the Nasdaq in 2005.
While a top name in home robotics, iRobot has had a rocky year. On Friday, it reported second-quarter revenue of $255.4 million, a 30 percent drop from the year-ago period. It reported a net loss of $43.4 million for the three-month period ended July 2.
The company also plans to shift certain non-core engineering roles to lower-cost regions as part of a cost-reduction plan, and lay off 10 percent of its workforce, roughly 140 employees, according to the earnings report.
The company has withdrawn the 2022 financial forecast that it issued in May and, citing “ongoing disruptions and uncertainty that could impact the company’s outlook,” it suspended providing all other guidance about future performance.
iRobot’s products, which map out the floor plans of its customers’ most intimate spaces, will augment Amazon’s suite of products that function by surveilling the home, and the people inside of it.
What began as a microphone in a speaker has evolved into a growing genre of devices meant to make domestic life more enjoyable. Last September, at the company’s annual fall press event, Amazon unveiled a 15-inch wall-mounted version of its Echo Show screen that watches and listens to your home, and a number of other products and services that all monitor consumers in some way to anticipate their needs.
The growth of such technology highlights consumers’ increasing tolerance for sensors and cameras trained on their daily routines. That evolution has drawn criticism from privacy advocates and concerned consumers. It also underscores how tech giants view the home as yet another platform for an array of services and a goldmine of personal data.
Amazon will acquire iRobot’s net debt under the terms of the deal, which will require approval from regulators and the robot-maker’s shareholders. Colin Angle will stay on as iRobot’s chief executive.
Amazon shares fell 1.2 percent Friday to close at $140.80, giving it a market value of $1.4 trillion.
Last week, the Seattle-based giant reported its second consecutive quarterly loss — of $2.03 billion, or 20 cents per share — driven by a $3.9 billion write-down tied to its investment in electric vehicle start-up Rivian Automotive, the Associated Press reported . But Amazon also recorded a better-than-expected $121.2 billion in revenue during the second quarter.