On Friday, commerce titan Amazon announced it acquired iRobot, the maker of the Roomba vacuum, for $61 per share in an all-cash transaction that will equal a total of $1.7 billion.
“We know that saving time matters, and chores take precious time that can be better spent doing something that customers love,” Amazon Devices Senior Vice President Dave Limp said in a statement.
“Over many years, the iRobot team has proven its ability to reinvent how people clean with products that are incredibly practical and inventive – from cleaning when and where customers want while avoiding common obstacles in the home, to automatically emptying the collection bin.”
iRobot CEO and chairman Colin Angle, who will hold his position upon completion of the acquisition, explained he couldn’t think of a better way for the company to continue its work than Amazon, which promotes “building thoughtful innovations that empower people to do more at home.”
iRobot is the latest — and fourth-heftiest price-wise — in a long line of big-money Amazon acquisitions. In 2017, it purchased grocer Whole Foods Market for $13.7 billion, while it acquired film studio MGM for $8.5 billion last year. Last month, the company announced a $3.9 billion deal for One Medical.
The deal will still need approval from regulators and iRobot shareholders in order to go through. Following the news, iRobot’s midday trading rose 19%, while Amazon was down 1.4%.
The circular, self-guiding Roomba became a household name after its debut in the early 2000s, selling more than 40 million units. Thanks to that level of success, iRobot continued to work the market by introducing its robot mop, in addition to other products like purifiers.
The company has planned to expand to lawn work by debuting its robot lawnmower — known as the Terra — though plans for it were canceled in 2020 due to the COVID-19 pandemic.
Unfortunately for Roomba and its maker, sales prior to the Amazon deal had been significantly waning due to a variety of issues. Its third-quarter revenue saw a 30% drop to $255.4 million, with a net loss that jumped from 2.8 million a year ago to $43.4 million.
Meanwhile, the company said it would be cutting 10% — 140 employees — from its workforce in order to combat rising costs.
For Amazon, Roomba adds to their impressive arsenal of smart home appliances that includes voice assistant Alexa and Ring security cameras. Perhaps the best companion for Roomba will be the $1000 Astro home monitoring robot, which Amazon brought into the fold last year.
The Roomba will likely be undergoing major changes in order to better connect with its new electronic relatives and the general smart household infrastructure Amazon has strived to build.
“It is easy to see how Amazon will integrate products like Roomba into the Alexa and Prime ecosystems, so that people have one central point of monitoring and control for many tasks and activities,” GlobalData Managing Director Neil Saunders told CNN.
Still, the deal isn’t free of concerns. With Amazon’s ever-evolving home device collection comes questions on data collection and privacy, especially since so many of their products are used by the daily consumer. Additionally, the company’s hold over not just the smart home market, but several major commerce industries, has also faced frequent criticism from anti-monopoly advocates.
Andrew Rhoades is a Contributing Reporter at The National Digest based in New York. A Saint Joseph’s University graduate, Rhoades’ reporting includes sports, U.S., and entertainment. You can reach him at email@example.com.