Amazon’s connected device shopping cart grows with $1.7 billion deal for Roomba maker

Aug. 5 (Reuters) – Amazon.com Inc (AMZN.O) to acquire robot vacuum cleaner maker iRobot Corp (IRBT.O) in a cash deal for about $1.7 billion, in the latest push of the world’s largest online retailer to his shopping cart with smart home devices.

Amazon is paying $61 per share, valuing iRobot at a 22% premium over the stock’s latest closing price of $49.99.

At its peak, the Roomba maker traded for $197.4 when hygiene-conscious consumers invested in premium robot vacuums during pandemic lockdowns.

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In addition to sweeping up debris, the Roomba vacuums, which cost as much as $1,000, collect spatial data about households that could be valuable to companies developing so-called smart home technology.

However, iRobot’s second quarter revenue declined 30% due to weak demand and cancellations from retailers in North America and Europe, the Middle East and Africa as consumers rethink how they spend their money amid rising prices. inflation.

Analysts have said that large cash-rich tech companies could face a merger and acquisition wave by taking advantage of low valuations due to growth pressures. Amazon is sitting on cash and cash equivalents of more than $37 billion as of the second quarter.

Devices make up a fraction of the total sales of Amazon, which sells smart thermostats, security devices, wall-mounted smart displays and recently launched a dog-like robot called Astro.

If the deal is terminated, Amazon will have to pay iRobot a $94 million termination fee. Colin Angle will remain the CEO of iRobot after the deal closes.

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 physical doctor’s offices for the first time. read more

(This story corrects to say that sales are down 30%, not 37%, in section 5)

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Reporting by Akash Sriram and Nivedita Balu in Bengaluru; Editing by Arun Koyyur

Our Standards: The Thomson Reuters Trust Principles.

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