Home purchasing

Amazon buys iRobot for $1.7 billion. iRobot’s stock is on the rise.

Amazon.com is engaged in a brief acquisition spree. The tech giant said Friday it was buying iRobot, a maker of smart vacuum cleaners, marking its second acquisition in about two weeks.

In an all-cash deal, iRobot (ticker: IRBT) will be purchased for approximately $1.7 billion, including debt. The deal price of $61 per share represents a 22% premium to iRobot’s closing price on Thursday.

Source: The Economic Times

The Roomba robot vacuum was created by iRobot and debuted in 2002. Roomba customers can now clean their rooms using voice commands using Alexa, Amazon’s virtual assistant technology.

The announcement sent the price of iRobot shares soaring; it rose nearly 20% to $59.59 on Friday morning after trading was halted earlier. Amazon.com (AMZN) was down 0.8%. Investors shouldn’t be surprised by the reverse move given the premium Amazon is paying for the purchase.

Amazon’s acquisition of iRobot comes just a month after it paid around $3.9 billion, including debt, for healthcare provider One Medical.

Amazon should now focus on getting iRobot back on track, which is currently experiencing significant challenges. iRobot said on Friday that its performance was impacted by “unexpected order reductions, delays and cancellations from retailers.” Second-quarter revenue was reported at $255 million, which was below the average estimate of $304 million.

The company also announced that it was limiting its operations and eliminating 140 workers, or nearly 10% of its total workforce.

About iRobot

iRobot is a multinational consumer robot company that creates thinking robots and smart home solutions that improve people’s lives. In 2002, iRobot unveiled the first Roomba robot vacuum. Today, iRobot is a multinational company that has sold millions of robots around the world. iRobot’s product line includes cutting-edge technology and concepts for cleaning, mapping and navigation. IRobot engineers create robots and smart home appliances based on this portfolio to help consumers make their homes easier to maintain and live healthier.