Amazon recently made a very interesting acquisition with its recent deal to buy iRobot. It is a company well known for its stand-alone household vacuum cleaners and other cleaning devices. The deal is valued at approximately $1.7 billion, with iRobot receiving $61 per share in an all-cash deal.
“We know time savings matter, and housework takes valuable time that is better spent doing things that customers enjoy,” said Dave Limp, senior vice president of Amazon Devices. “Over the years, the iRobot team has proven its ability to reinvent the way people clean with incredibly practical and inventive products, from cleaning when and where customers want, avoiding common obstacles in the home, to automatically emptying the trash can. Customers love iRobot products and I am excited to work with the iRobot team on inventions that will make life easier and more enjoyable for customers.”
– Amazon press release
iRobot® Roomba® s9+ retails around $999.
While there are many companies in the robot vacuum segment, iRobot is certainly in the premium echelon. The company also places great value on software experience and believes that “its software is the reason why its products are chosen over the competition.” The company has a very wide range of products, ranging from $200 to some models that sell for over $1,000.
The Amazon Data Addiction Itch
Many people may wonder what Amazon is doing by buying a company that makes robotic vacuum cleaners. Well, Amazon is present in almost every product category and has a comprehensive presence in the retail sector. A company can do this because of the huge data advantage it has over its competitor, but that alone is not enough. Data needs to be presented in context to make sense, and that’s exactly what many smart home products strive for. For example, a robot vacuum can collect telemetry data about the size of your house, how often it is cleaned, and the number of people, among other things. This helps companies fine-tune the targeting of their products to consumers.
But that’s not all, given that Amazon has a large segment of smart home products, the iRobot brand could fit perfectly into that equation. The company is already selling everything from smart doorbells to smart lights powered by Alexa. iRobot products can be seamlessly integrated with Alexa, helping Amazon provide better end-to-end solutions.
Finally, while Amazon and iRobot have signed a sale agreement, the final sale will only close once all regulatory approvals have been received. While iRobot’s stock price recently jumped to $59 per share, very close to Amazon’s $61 offer, it shows the market is highly confident that the deal will close successfully.