Amazon to acquire iRobot, maker of Roomba vacuums

A vacuuming Roomba model robot is displayed at iRobot headquarters in Bedford, Massachusetts

Scott Eells | Bloomberg | Getty Images

Amazon is acquiring iRobot for $61 a share, an all-cash deal that values the Roomba maker at $1.7 billion, the companies announced Friday.

The deal will deepen Amazon’s presence in consumer robotics. Amazon made a bold bet on the space last year when it unveiled the Astro home robot, a $1,500 device that’s equipped with the company’s Alexa digital assistant and can follow consumers around their home. It’s also launched an array of smart home devices, like Ring doorbells, as well as voice-activated thermometers and microwaves.

“Over many years, the iRobot team has proven its ability to reinvent how people clean with products that are incredibly practical and inventive — from cleaning when and where customers want while avoiding common obstacles in the home, to automatically emptying the collection bin,” said Dave Limp, Amazon’s hardware devices chief, in a statement. “Customers love iRobot products — and I’m excited to work with the iRobot team to invent in ways that make customers’ lives easier and more enjoyable.”

The acquisition marks Amazon’s fourth-largest deal, behind its $13.7 billion purchase of grocery chain Whole Foods in 2017, its $8.45 billion purchase of film studio MGM last year, and its $3.9 billion acquisition of boutique primary-care provider One Medical, announced last month.

iRobot, founded in 1990 by Massachusetts Institute of Technology roboticists, is best known for making the Roomba, a robotic vacuum launched in 2002 that can clean consumers’ floors autonomously. Since then, it has introduced robotic mops and pool cleaners. iRobot also has a subscription program that offers automatic equipment replenishment, among other services.

Amazon is buying iRobot at a time when the robot maker is facing broad headwinds. The company reported second-quarter results on Friday that showed a 30% annual decline in revenue, primarily due to “unanticipated order reductions, delays and cancellations” from retailers in North America and Europe, the Middle East and Africa.

iRobot became a pandemic darling in 2020 and 2021, as consumers spent more time at home and bought up robot vacuums to keep their homes clean. In recent quarters, its business has suffered from supply chain constraints. iRobot said it now has a glut of inventory amid “lower-than-expected” orders from retailers.

Revenue for the second quarter came in at $255.4 million, well short of the $303 million expected by analysts surveyed by Refinitiv. Its losses widened to 35 cents per share, adjusted. Analysts surveyed by Refinitiv had expected a loss of $1.55 per share.

Facing rising costs and falling revenue, iRobot said it would cut about 140 employees, or 10% of its workforce.

Once the deal closes, iRobot CEO Colin Angle will continue to run the company.

Shares of iRobot surged more than 19% in premarket trading, after they were briefly halted following the announcement of the deal. Amazon’s stock was down more than 1%.

WATCH: Amazon to acquire One Medical for roughly $3.9 billion