The deal announced Friday is also a continuation of Amazon’s business strategy to expand market share in various product categories through acquisitions. Ring, which makes video doorbells and other smart home technology, was picked up in February 2018, by 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 $13.7 billion deal.
(Amazon founder Jeff Bezos owns The Washington Post.)
The next generation of home robots will be more capable – and possibly more social
The move comes just two weeks after Amazon announced it would buy primary care provider One Medical for $3.9 billion as part of a major expansion of the tech company’s healthcare ambitions. The link, one of the largest ever acquisitions, gives Amazon a physical network of healthcare offices and providers and enhances its existing healthcare portfolio, which includes an online pharmacy and Amazon Care, a virtual and in-service urgent care.
Amazon’s offer of $61 per share represents a 22 percent premium over Thursday’s closing price of $49.99. On Friday, iRobot stock rose about 19.1 percent to close at $59.54.
“We know that saving time is important, and that chores take up valuable time that can be better spent doing something customers love,” said Dave Limp, senior vice president of Amazon devices. “Over many years, the iRobot team has proven their ability to reinvent the way people clean with incredibly practical and innovative products.”
Founded in 1990 by robotics professionals from the Massachusetts Institute of Technology, iRobot offers a line of robotic vacuums and mops, as well as air purifiers and handheld vacuums. Its signature Roomba, which retails for up to $1,000, recognizes the contours and angles of floors and can detect objects, provides WiFi and smartphone connectivity and can be summoned by voice-activated smart home devices. The company began trading on the Nasdaq stock exchange in 2005.
While the iRobot name is the most prominent name in home robotics, it has had a rocky year. On Friday, it reported second-quarter revenue of $255.4 million, down 30 percent from the same period last year. It posted a net loss of $43.4 million for the three months ended July 2.
The company also plans to shift some non-core engineering roles to lower-cost areas as part of a cost-cutting plan, laying off 10 percent of its workforce, about 140 employees, according to an earnings report.
The company withdrew its 2022 financial forecasts it issued in May, and suspended providing all other guidance on future performance, citing “ongoing turmoil and uncertainty that could affect the company’s outlook”.
Drawing the floor plans of the most intimate spaces for its customers, iRobot Products will enhance Amazon’s suite of products that work by monitoring the home and the people inside.
What started as a microphone in a speaker has evolved into a growing type of device meant to make home life more enjoyable. Last September, at the company’s annual press event, Amazon unveiled a 15-inch wall-mounted version of the Echo Show that watches and listens to your home, and a number of other products and services that monitor all consumers in some way anticipating their needs.
The growth of this technology highlights consumers’ increasing tolerance for sensors and cameras trained in their daily routines. This development sparked criticism from privacy advocates and concerned consumers. It also underscores how tech giants view the home as another platform for a host of services and a goldmine of personal data.
Amazon will receive iRobot’s net debt under the terms of the deal, which will require regulatory approval and the bot maker’s shareholders. Colin Angle will remain as CEO of iRobot.
Amazon shares fell 1.2 percent on Friday to close at $140.80, giving it a market value of $1.4 trillion.
The Seattle-based giant last week reported its second straight quarterly loss — $2.03 billion, or 20 cents per share — driven by a $3.9 billion reduction linked to its investment in electric car startup Rivian Automotive, the Associated Press reported. According to the Associated Press. . But Amazon also posted better-than-expected revenue of $121.2 billion during the second quarter.