Alessia! Start my Roomba: Amazon buys the iRobot robot vacuum cleaner for $ 1.7 billion

Amazon.com Inc will acquire iRobot Corp, maker of the Roomba robot vacuum cleaner, in an all-cash deal for approximately $ 1.7 billion in the latest push from the world’s largest online retailer to expand its stable of smart home devices.

Amazon will pay $ 61 per share, valuing iRobot at a 22% premium over the stock’s last closing price of $ 49.99.

Shares of iRobot were up 19% in trading on Friday to $ 59.66. At its peak during the COVID-19 pandemic blockade, iRobot shares were more than double that price as hygiene-conscious consumers invested in premium vacuum cleaners.

The acquisition follows a vision outlined by Amazon in 2021. Dave Limp, senior vice president of Amazon, told reporters: “We believe that in five to ten years, every home will have at least one robot that will become a vital part of your daily life. ”

IRobot CEO Colin Angle also said homes should have a plethora of devices that communicate seamlessly with each other and will someday face social challenges such as aged care.

Amazon’s device unit represents only a small fraction of the company’s revenue, but the e-commerce giant has steadily expanded its range with more speakers showing its Alexa voice assistant and with doorbells and home security cameras. by Ring, which it acquired in 2018.

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Ethan Glass, an antitrust expert with the law firm Cooley LLP, said the US Federal Trade Commission is likely to look into the transaction.

“I would say there is a three in four chance of a thorough investigation and a one in four chance of a challenge,” he said. “Politicians have made it clear that they would rather go to court and lose than let a deal that is later criticized as anti-competitive.”

Amazon said it will continue to supply iRobot products to other retailers and keep them compatible with voice assistants from other companies.

In addition to sweeping up the dirt, Roomba vacuums, which cost up to $ 1,000, collect spatial data on households that could prove invaluable to future smart home technology. One critic, Ron Knox of the Institute for Local Self-Reliance, on Twitter called the deal a privacy “nightmare” because it would expand personal information about the house in the retailer’s arsenal.

Amazon has claimed to safeguard customer privacy and not to sell their data. Among the information gathered, a consumer found https://www.pressure.com/investigates/special-report/amazon-privacy-lobbying/#sidebar, there were records of everything they searched for on Amazon, plus more of 1,000 contacts from his phone and what part of the Quran he listened to.

IRobot’s fortunes took a hit as consumers started rethinking their purchases amid rising inflation. Second quarter revenues fell 30% due to weak demand from retailers in North America and Europe, the Middle East and Africa.

The acquisition comes at a time when analysts expect cash-rich tech companies to embark on a merger and acquisition spree to take advantage of low valuations due to growth pressures. Amazon currently has cash and cash equivalents of over $ 37 billion and last month announced a deal to purchase primary care provider One Medical.

“It looks like (CEO) Andy Jassy will employ M&A longer than (predecessor) Jeff Bezos and it makes more sense to me now that Amazon is bigger and has more liquidity,” DA Davidson analyst Thomas Forte said.

If the deal fails, Amazon would have to pay iRobot a $ 94 million resolution fee. Angle would remain CEO of iRobot upon completion of the deal.

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