Home LATEST NEWS HIGH TECH Amazon buys iRobot for $2.2 billion

Amazon buys iRobot for $2.2 billion


In addition to sweeping up dirt, Roomba vacuums, which cost up to US$1,000 (about CA$1,293), collect spatial data about homes that could prove valuable to companies developing smart home technology.

However, iRobot’s second-quarter revenue fell 30% due to weak demand and order cancellations from retailers in North America and Europe, the Middle East and Africa. In times of inflation, consumers seem to rethink how their money is spent.

At its peak, the Roomba maker’s stock traded at US$197 (around C$255) as hygiene-conscious people invested in high-end robot vacuums during the COVID-19 pandemic.

Amazon will pay US$61 (about CA$79) per share, which values ‚Äč‚ÄčiRobot at a 22% premium to the stock’s last closing price of US$50 (about CA$65).

Mergers to be expected

Analysts predict that big, cash-rich tech companies could embark on a series of mergers and acquisitions, taking advantage of low valuations due to growth pressures. Amazon has cash and cash equivalents of more than US$37 billion (about C$48 billion) in the second quarter.

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The devices represent just a fraction of overall sales for Amazon, which sells smart thermostats, security devices and smart wall displays, in addition to recently launching a canine-like robot called Astro.

If the agreement is terminated, Amazon will pay iRobot a termination fee of US$94 million (approximately C$122 million). Once the deal closes, Colin Angle will remain as iRobot’s chief executive.

Amazon also completed the purchase of primary care provider One Medical for US$3.5 billion (about C$4.5 billion). The company is thus expanding the e-commerce giant’s virtual healthcare and will add physical doctors’ offices for the first time.

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