Author: Geoffrey Milan
Amazon has been busy swooping up companies that can potentially enhance its business model. But now, the tech giant has its eyes set on iRobot valued at $1.7 billion.
The deal was announced by Amazon a few days back, but it hasn’t been approved yet.
Let’s give you more insight into this acquisition.
Amazon is taking over iRobot for $1.7billion, which analysts see as another way the company is pushing into our homes. iRobot is the maker of the famous robotic vacuum Roomba.
The eCommerce giant also owns other consumer devices and services that help to keep customers more engaged with the company.
These products and services include their digital assistant called Alexa, streaming devices and services, plus a lineup of fitness wearables.
Just last year, Amazon added Astro to its collection of devices. Astro is another robot made to carry small items around. The robot is equipped with cameras to keep an eye out for intruders.
In 2018, Amazon acquired Ring, which is a video doorbell and smart-home tech maker for homes, and another company called Blink, a connected camera, and doorbell maker.
Earlier in 2017, Amazon entered the grocery industry by announcing the acquisition of Whole Foods Market for $13.7 billion.
These acquisitions are part of Amazon’s overall business strategy to increase the company’s market share in various product categories.
Amazon’s new move to buy iRobot comes only two weeks after the company announced a potential $3.9 billion deal to buy One Medical (a primary healthcare provider).
The One Medical acquisition will give Amazon access to a wide network of physical healthcare providers and offices. This network will strengthen the company’s current healthcare portfolio, which includes Amazon Care and its online pharmacy.
As for the iRobot acquisition, investors are already feeling the impact of the announcement as iRobot’s stock climbed 19% and closed at $59.54 that same day.
iRobot is a robotics company created by roboticists from MIT (Massachusetts Institute of Technology). The company offers a spectrum of automated gadgets like vacuums (including handheld types), mops, purifiers, and more.
However, the iRobot product that caught the spotlight is their signature Roomba, which studies its environment to learn the patterns of the floor corners, contours, and objects in the area. Users can also summon Roomba using the WiFi network from their smartphones.
Despite being a successful robotics company, iRobot has had a tough time in 2022.
Last Friday, iRobot reported $255.4 million in revenue in this second quarter, which equates to a 30% decrease from the previous year. iRobot also reported a loss of about $43.4 million within these three months (ending by July 2).
Reports say that iRobot has prepared a 10% layoff of the company’s workforce. iRobot also withdrew its yearly forecast due to uncertainty and ongoing disruptions affecting the company’s performance.
However, Amazon is ready to shoulder the burden and even acquire iRobot with its outstanding net debt. As for now, the deal is still waiting for approval from iRobot’s shareholders and regulators that may be skeptical of the deal.
Conclusion
Amazon’s acquisition of iRobot is exciting news for stakeholders as the company is constantly growing its products and services, which in turn increases the overall value of the company.