Amazon.com Inc AMZN.O will acquire the maker of robot vacuum cleaner iRobot Corp IRBT.O in an all-cash deal for about $1.7 billion, in the latest push by the world’s largest online retailer to add to its cart of smart home devices.
Amazon will pay $61 per share, valuing iRobot at a premium of 22% from the stock’s last closing price of $49.99.
At its peak, the Roomba maker traded at $197.4 as hygiene-conscious consumers invested in premium robot vacuum cleaners during pandemic lockdowns.
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Besides sweeping up dirt, the Roomba vacuums that costs as much as $1,000 collect spatial data on households that could prove valuable to companies developing so-called smart home technology.
However, iRobot’s second-quarter revenue fell 30% due to weak demand and cancellations from retailers in North America and Europe, Middle East and Africa as consumers rethink how they spend their money during rising inflation.
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Analysts have said cash-rich big technology companies could get on an M&A spree, taking advantage of low valuations due to growth pressures. Amazon is sitting on cash and cash-equivalents of over $37 billion as of the second quarter.
Devices make up for a fraction of the overall sales of Amazon, which sells smart thermostats, security devices, wall mounted smart display and had recently launched a canine-like robot called Astro.
In case the deal is terminated, Amazon would be required to pay iRobot a termination fee of $94 million. On completion of the deal, Colin Angle will remain as the chief executive of iRobot.
Amazon is also buying primary care provider One Medical ONEM.O for $3.49 billion, expanding the e-commerce giant’s virtual healthcare and adding brick-and-mortar doctors’ offices for the first time.
(Reporting by Akash Sriram and Nivedita Balu in Bengaluru; Editing by Arun Koyyur)
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