Amazon has agreed to buy iRobot, the maker of the popular Roomba vacuum cleaner, at a price of $61 a share in an all-cash deal valuing the automaker at $1.7 billionas announced by both companies.
The agreement, which is pending shareholder and regulatory approvalwill deepen Amazon’s presence in consumer robotics.
“Customers love iRobot products, and I’m excited to work with the team to invent ways that make customers’ lives easier and enjoyable,” Dave Limp, Amazon’s head of hardware devices, said in a statement.
He also noted that, for many years, the iRobot team has demonstrated its ability to reinvent the way people clean with products that are “incredibly practical and ingenious.”
iRobot CEO Colin Angle will continue to run the company once the deal is closed, according to the information released.
iRobot shares jumped more than 19% in early trading, after they paused briefly following the deal announcement. However, Amazon shares fell more than 1%.
iRobot, founded in 1990 by roboticists at the Massachusetts Institute of Technology, is best known for making the Roomba, a robotic vacuum cleaner released in 2002 that can clean the floors of consumers autonomously.
The acquisition marks Amazon’s fourth-largest deal, behind its $13.7 billion purchase of supermarket chain Whole Foods in 2017. the $8.45 billion purchase of the MGM movie studio last year and the $3.9 billion acquisition of boutique primary care provider One Medical, announced last month.
Last year, Amazon introduced the Astro home robota $1,500 device that is equipped with the company’s Alexa digital assistant and can follow consumers around their homes.
It also launched a variety of smart home devices, such as Ring doorbells, as well as voice-activated thermometers and microwaves.
Amazon is buying iRobot at a time when robot maker faces major headwinds.
The company reported second-quarter results on Friday, which showed a 30% annual decline in revenuemainly due to “unforeseen order reductions, delays and cancellations” by retailers.
iRobot said it now has excess inventory amid “lower than expected” orders. iRobot said that would eliminate about 140 employees or 10% of its workforceas it faces rising costs and falling revenues.
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