Amazon has recently pursued a very interesting acquisition, with a recent agreement to purchase iRobot. This is a company well known for its autonomous home vacuum cleaners and other cleaning devices. The deal is valued at approximately $1.7 billion, fetching iRobot $61 per share in an all-cash transaction.
“We know that saving time matters, and chores take precious time that can be better spent doing something that customers love,” said Dave Limp, SVP of Amazon Devices. “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. 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.”
While there are many companies in the robotic vacuum segment, iRobot certainly occupies the premium echelon. The company also places a lot of importance on the software experience, and believes “its software is the reason to choose its products over competitors.” The company has a very wide range of products, ranging from as low as $200, to some models retailing for over $1000.
Itching Amazon’s Data Addiction
A lot of people might wonder, what is Amazon doing buying a company that makes robot vacuum cleaners. Well, Amazon is present in almost all product categories and has an all encompassing presence in the retail sector. The company is able to do due to the massive data edge it has over its competitor, but that alone is not enough. Data needs to be presented with context to make sense, and this is exactly what many smart home products aim to do. For example, a robotic vacuum cleaner can collect telemetry data on the size of your house, how often it is cleaned, and no of members among other things. This helps companies fine tune their product targeting to consumers.
That’s not all though, given Amazon has a big smart home product segment, the iRobot brand can fit perfectly in that equation. The company already sells everything from smart door bells to smart lights, powered by Alexa. iRobot products can easily be integrated with Alexa, helping Amazon provide better end to end solutions.
On a final note, although Amazon and iRobot have signed a sale agreement, the final sale will only close after all regulatory approvals are in order. Although recently, iRobot’s stock price jumped to $59 per share, very close to Amazon’s offer of $61, which signals the market has high confidence the deal will close successfully.