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Amazon to buy Roomba-maker iRobot for $1.65 billio

Aug. 5, 2022 Updated Fri., Aug. 5, 2022 at 7:15 p.m.

Colin Angle, CEO and co-founder of iRobot Corp., displays an iRobot Roomba robot  in Half Moon Bay, Calif., on June 18, 2013.  (Bloomberg )
Colin Angle, CEO and co-founder of iRobot Corp., displays an iRobot Roomba robot  in Half Moon Bay, Calif., on June 18, 2013. (Bloomberg )
By Matt Day Bloomberg

Amazon devices are listening, watching and will soon be cleaning up after you.

The e-commerce giant will acquire iRobot – best known for its robotic vacuum Roomba – under a $1.7 billion all-cash deal, the latest step in its push into the home.

From fitness wearables to streaming devices to its Alexa digital assistant, Amazon has advanced a lineup of devices under an ecosystem that ties consumers more tightly to the company and its services.

Last year, it introduced Astro, a $1,000-plus robot meant to ferry around small items and keep its cameras peeled for intruders.

The deal announced Friday also is a continuation of Amazon’s business strategy to expand market share in different product categories through acquisitions.

It snapped up Ring, which makes video doorbells and other smart-home technology, in February 2018, and before that Blink, which makes connected cameras and doorbells for the home.

It also stunned the grocery industry in 2017 when it announced the purchase of Whole Foods Market, a deal valued at $13.7 billion.

The move comes just two weeks after Amazon announced it would buy the primary care provider One Medical for $3.9 billion as part of a major expansion of the tech company’s health care ambitions.

The tie-up, one of its largest acquisitions ever, gives Amazon a physical network of health care offices and providers and bolsters its existing health care portfolio, which includes an online pharmacy and Amazon Care, a virtual and in-home urgent care service.

Amazon’s $61-per-share offer represents a 22% premium over Thursday’s closing price of $49.99.

On Friday, iRobot stock surged nearly 19.1% to close at $59.54.

“We know that saving time matters, and chores take precious time that can be better spent doing something that customers love,” said Dave Limp, senior vice president of Amazon Devices.

“Over many years, the iRobot team has proven its ability to reinvent how people clean with products that are incredibly practical and inventive.”

Founded in 1990 by roboticists from the Massachusetts Institute of Technology, iRobot offers an array of automated vacuums and mops, as well as air purifiers and handheld vacuums.

Its signature Roomba, which retails for as much as $1,000, learns the contours and corners of floors and can detect objects, offering connectivity to Wi-Fi networks and smartphones and can be summoned by voice-activated smart home devices.

The company began trading on the Nasdaq in 2005 but, iRobot has had a rocky year.

On Friday, it reported second-quarter revenue of $255.4 million, a 30% drop from the year-ago period.

It reported a net loss of $43.4 million for the three-month period ended July 2.

The company also plans to shift certain non-core engineering roles to lower-cost regions as part of a cost-reduction plan, and lay off 10% of its workforce, roughly 140 employees, according to the earnings report.

The company has withdrawn the 2022 financial forecast that it issued in May and, citing “ongoing disruptions and uncertainty that could impact the company’s outlook,” it suspended providing all other guidance about future performance.

iRobot’s products, which map out the floor plans of its customers’ most intimate spaces, will augment Amazon’s suite of products that function by surveilling the home, and the people inside of it.

What began as a microphone in a speaker has evolved into a growing genre of devices meant to make domestic life more enjoyable.

Last September, at the company’s annual fall press event, Amazon unveiled a 15-inch wall-mounted version of its Echo Show screen that watches and listens to your home, and a number of other products and services that all monitor consumers in some way to anticipate their needs.

The growth of such technology highlights consumers’ increasing tolerance for sensors and cameras trained on their daily routines.

That evolution has drawn criticism from privacy advocates and concerned consumers.

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