Amazon.com Inc will acquire robot vacuum maker iRobot Corp in a cash deal for about $1.7 billion, in the latest effort by the world’s largest online retailer to add to its shopping cart of smart home devices.
Amazon is paying $61 per share, valuing iRobot at a 22 percent premium over the stock’s latest closing price of $49.99.
At its peak, the Roomba maker traded for $197.4 when hygiene-conscious consumers invested in premium robot vacuums during pandemic lockdowns.
In addition to sweeping up debris, the Roomba vacuums, which cost as much as $1,000, collect spatial data about households that could be valuable to companies developing so-called smart home technology.
However, iRobot’s second-quarter revenue declined 37% due to weak demand and cancellations from retailers in North America and Europe, the Middle East and Africa as consumers rethink how they spend their money amid rising prices. inflation.
Analysts have said that large cash-rich tech companies could face a merger and acquisition wave by taking advantage of low valuations due to growth pressures. Amazon is sitting on cash and cash equivalents of more than $37 billion as of the second quarter.
Devices make up a fraction of the total sales of Amazon, which sells smart thermostats, security devices, wall-mounted smart displays and recently launched a dog-like robot called Astro.
If the deal is terminated, Amazon will have to pay iRobot a $94 million termination fee. Colin Angle will remain the CEO of iRobot after the deal closes.
Amazon is also buying primary care provider One Medical for $3.49 billion, expanding the e-commerce giant’s virtual healthcare and adding physical doctor’s offices for the first time.