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Amazon is buying vacuum cleaner maker iRobot for around $1.7 billion

NEW YORK (AP) — Amazon announced on Friday that it has agreed to acquire vacuum cleaner maker iRobot for about $1.7 billion and acquire another company to expand its collection of smart home appliances, amid broader concerns about of the company’s market power.

iRobot sells its products globally and is best known for the round Roomba vacuum cleaner, which joins the Seattle-based e-commerce and tech giant’s list of smart home features alongside voice assistant Alexa, Astro robot and Ring security cameras has been recorded .

Amazon said it will acquire iRobot for $61 per share in an all cash transaction that will include iRobot’s net debt. The company has total debt of approximately $332.1 million as of July 2. The transaction is subject to shareholder and regulatory approvals. Upon completion, iRobot CEO Colin Angle will remain in his position.

Also on Friday, iRobot released its quarterly results. Sales plummeted 30% due to order cuts and delays, and the company said it would lay off 10% of its workforce.

iRobot shares are up 19% in morning trade. Amazon’s was down 1.4%.

iRobot was founded in 1990 by a trio of roboticists from Massachusetts Institute of Technology, including Angle. iRobot’s early ventures resulted in rovers capable of performing military and disaster relief tasks after the September 11 attacks.

Profits from defense contracts allowed iRobot to experiment with a variety of other robots, produce some duds, and a major commercial success: the first Roomba, launched in 2002 and pioneering the automatic vacuum cleaner market.

The company spun off its defense robotics division in 2016 to become almost exclusively a seller of vacuum cleaners and a few other household robots like the Braava robot mop. It had planned to launch a robotic lawn mower in 2020 but backed out, citing issues surrounding the pandemic.

The purchase of iRobot is Amazon’s fourth-biggest acquisition, led by the $13.7 billion deal to buy Whole Foods in 2017.

The deal comes as anti-monopoly advocates continue to raise concerns about Amazon’s increasing dominance. Last month, Amazon announced it would buy primary care provider One Medical in a deal worth about $3.9 billion, a move that further expands its healthcare reach.

Sen. Amy Klobuchar, D-Minn., who heads the Senate Department of Justice antitrust panel, has called on the Federal Trade Commission to investigate the acquisition, as have other critics who have urged regulators to scrap the purchase over concerns about the to blocking the company’s past behavior and potential impact on consumer health data.” Regulators also have discretion to challenge Amazon’s $8.5 billion acquisition of Hollywood studio MGM, which closed earlier this year.

https://www.wane.com/news/amazon-to-buy-vacuum-maker-irobot-for-roughly-1-7b/ Amazon is buying vacuum cleaner maker iRobot for around $1.7 billion

Tom Vazquez

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