Amazon acquiring maker of Roombas; $1.7B deal fits in retailer’s AI push

iRobot co-founder and Chief Executive Officer Colin Angle holds a Roomba vacuum in a hallway decorated in patents the company owns, at iRobot headquarters in Bedford, Mass., in this file photo.
(AP)
iRobot co-founder and Chief Executive Officer Colin Angle holds a Roomba vacuum in a hallway decorated in patents the company owns, at iRobot headquarters in Bedford, Mass., in this file photo. (AP)


Amazon will acquire iRobot in a $1.7 billion all-cash deal, the companies announced Friday.

iRobot is best known for its robotic vacuum Roomba. Sold at $61 per share, the acquisition highlights Amazon's push into the home, linking a variety of consumer products through artificial intelligence.

From fitness wearables and tablets to streaming devices and 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 proposed deal is also a continuation of Amazon's business strategy to expand market share in different product categories through acquisitions. Ring, the maker of the video door bell and the home security product Blink both merged with Amazon as the company expands its list of gadgets and home-centric offerings.

The planned deal comes just two weeks after Amazon announced the purchase of primary care provider One Medical for $3.9 billion, in a major expansion of the tech company's health-care ambitions.

One of its largest acquisitions ever, the tie-up will give Amazon a physical network of health-care offices and providers and bolsters the company's existing health-care portfolio, which includes an online pharmacy and Amazon Care, a virtual and in-home urgent care service.

Shares of iRobot surged nearly 20 percent after the announcement Friday, when the company also reported a loss of $43.4 million in its second quarter.

The Bedford, Mass.-based iRobot said it had a loss of $1.60 per-share. Losses, adjusted for pretax expenses and stock option expense, came to 35 cents per share.

The results exceeded Wall Street expectations. The average estimate of four analysts surveyed by Zacks Investment Research was for a loss of $1.59 per share. The robotics company posted revenue of $255.4 million in the period.

Amazon's offer of $61 a share represents a premium of more than 20 percent for iRobot.

Information for this article was contributed by Hamza Shaban of The Washington Post.


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