Amazon announced the acquisition of robotic vacuum manufacturer iRobot for around $61 per share or $1.7 bn including the net debt of the company – this would be a 22% premium to the closing price the day before the deal was announced. We believe counteroffers for iRobot from other parties are unlikely as we enter a period of higher global consumer caution and iRobot like many other companies has been struggling with supply chain and inflationary cost pressures, particularly compared to its Chinese peers. The deal is seen by many as a further strategic move by Amazon to increase its exposure to the smart-home automation market.
The acquisition is likely to receive a high level of scrutiny from regulators as some see this as a further incursion of surveillance by Amazon into people’s homes. iRobot’s Roomba range of robotic vacuum cleaners navigates by building up a virtual map of their surroundings, a data set which can be used to potentially drive further smart home related sales as well as increase the intelligence of other connected smart home devices.
The acquisition will be Amazon’s third largest to date and adds to a number of smart home related purchases made in the past few years including video door-bell maker Ring, and wi-fi company Eero.
If the deal closes, Roomba will be the third “mobile” system that Amazon could deploy in people’s homes along with their Astro robot designed for home monitoring and the indoor Ring Always Home Camera which is essentially a security camera attached to a flying indoor drone. The deal may also pave the way for iRobot’s Terra lawn mowing robot to finally come to market after being indefinitely delayed by the company a couple of years ago.