Amazon.com is engaged in a brief acquisition frenzy. The tech behemoth said on Friday that it was purchasing iRobot, a maker of smart vacuum cleaners, marking its second acquisition in roughly the past two weeks.
In an all-cash deal, iRobot (ticker: IRBT) will be purchased for around $1.7 billion, including debt. The price of the agreement, which works out to $61 per share, represents a 22 percent premium over iRobot’s Thursday closing price.
The Roomba robot vacuum was created by iRobot and debuted in 2002. Roomba customers can now clean their rooms using voice commands thanks to Alexa, Amazon’s virtual assistant technology.
The announcement caused the price of iRobot shares to soar; it increased by almost 20% to $59.59 on Friday morning after trade had been suspended earlier. Amazon.com (AMZN) experienced a decline of 0.8%. Investors shouldn’t be surprised by the swing in the opposite way given the premium Amazon is paying for the purchase.
The acquisition of iRobot by Amazon comes just a month after it paid around $3.9 billion, including debt, for the healthcare provider One Medical.
Amazon would now have to concentrate on getting iRobot back on track, which is currently experiencing significant challenges. iRobot stated on Friday that its performance was impacted by “unanticipated order reductions, delays, and cancellations from retailers.” Revenue for the second quarter was announced at $255 million, which was less than the $304 million average estimate.
The company also announced that it was limiting operations and eliminating 140 workers, or nearly 10% of its total workforce.
iRobot is a multinational consumer robot firm 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 across the globe. The product line of iRobot includes cutting-edge technology and concepts for cleaning, mapping, and navigation. IRobot engineers are creating robots and smart home appliances based on this portfolio to assist consumers in making their houses easier to maintain and healthier places to live.