Aug 5, 2022 - Economy

Amazon to buy Roomba maker iRobot

iRobot Inc. signage is displayed outside of the company's headquarters in Bedford, Massachusetts, U.S.,

(Photo: Michael Fein/Bloomberg via Getty Images)

Amazon is buying iRobot for $1.7 billion, the companies announced Friday morning.

Why it matters: The acquisition is Amazon's fourth-largest ever and reflects the tech giant's ambitions to entrench itself inside homes with smart devices.

Details: The $1.7 billion all-cash deal includes iRobot's net debt.

  • iRobot investors will receive $61 a share, a 22% premium to iRobot's closing price on Thursday.
  • Current iRobot CEO Colin Angle will remain in his role after the acquisition is complete.

The big picture: The acquisition shores up iRobot as it struggles to grow.

  • The company's second quarter revenue fell by about 30% from from the same time last year, it reported today.
  • Alongside the results, iRobot also announced that approximately 140 people would be losing their jobs, or 10% of its workforce.

Be smart: Amazon has always kept an eye on Roomba.

  • This year's Prime Day sales event was the eighth consecutive to feature the product prominently.
  • The Roomba made up 89% of iRobot's revenue, as of earlier this year.

Our thought bubble, via Axios' Margaret Harding McGill: Amazon, moving right along from its recently announced nearly $4 billion purchase of One Medical, is clearly not looking over its shoulder to see whether federal antitrust regulators will try to stop its acquisition spree.

What to watch: Shareholder approval of the deal. And any ongoing privacy issues.

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