Amazon to buy vacuum maker iRobot for roughly $1.7 billion
NEW YORK
Amazon on Friday announced it has agreed to acquire the vacuum cleaner maker iRobot for approximately $1.7 billion, scooping up another company to add to its collection of smart home appliances amid broader concerns from anti-monopoly and privacy advocates about Amazon’s market power and ability to gain deeper insights into consumers’ lives.
iRobot sells its products worldwide and is most famous for the circularshaped Roomba vacuum, which would join voice assistant Alexa, the Astro robot, Ring security cameras and others in the list of smart home features offered by the Seattle-based tech giant.
The move is part of Amazon’s bid to own part of the home space through services and accelerate its growth beyond retail, said Neil Saunders, managing director at GlobalData Retail. A slew of homecleaning robots adds to the company’s tech arsenal, making it more involved in consumers’ lives beyond static things like voice control. The latest line of Roombas use sensors to map — and remember — a home’s floor plan, offering a trove of data that Amazon could potentially integrate with its other products.
Amazon’s Astro robot, which helps with tasks like setting an alarm, was unveiled last year at an introductory price of $1,000. But its rollout has been limited and has received a lackluster response.
Amazon hasn’t had much success with household robots, but the iRobot acquisition and the company’s strong market reputation provide a “massive foothold in the consumer robot market” that could help Amazon replicate the success of its Echo line of smart speakers, said Lian Jye Su, a robotics industry analyst for ABI Research.
Su said it also illustrates the shortcomings of consumer robotics vendors like iRobot, which struggled to expand beyond a niche product and was in a “raceto-the-bottom” competition with Korean and Chinese manufacturers offering cheaper versions of a robotic vacuum.
On Friday, iRobot reported its quarterly results. Revenue plunged 30% primarily on order reductions and delays, and the company announced it was laying off 10% of its workforce.
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 current debt of approximately $332.1 million as of July 2. The deal is subject to approval by shareholders and regulators. Upon completion, iRobot’s CEO, Colin Angle, will remain in his position.
Noting that iRobot has been running its robotics homes. In other words, buyers get more bang — land, square footage, amenities — for the buck.
“Miami is the Wall
Street of the south. Broward got overlooked,” said Mike Pappas, president and CEO of the Keyes Company. “Palm Beach and Miami led the way in terms of the prices. Broward didn’t see such intensity and so now it’s getting its run because there’s better pricing.”
The wealthy are shopping for their next home in the same Broward neighborhoods. They turn to Fort Lauderdale, Parkland, Lighthouse Point/Pompano Beach, and Davie/ Plantation/Southwest Ranches for single-family homes. Fort Lauderdale — specifically Fort Lauderdale Beach, Victoria Park and Coral Ridge — has the most condo sales followed by Lighthouse Point/ Pompano Beach. platform on Amazon’s cloud service unit AWS for many years, Su said the acquisition could lead to more integration of Amazon speech recognition and other capabilities into vacuums.
In afternoon trading, iRobot shares rose 19%. Amazon’s were down 1.7%.
The deal comes as antimonopoly advocates continue to raise concerns about Amazon’s increasing dominance. The purchase of iRobot is Amazon’s fourth-largest acquisition, led by its $13.7 billion deal to buy Whole Foods in 2017. Last month, the company said it would buy the primary care provider One Medical in a deal valued roughly at $3.9 billion, a move that expanded its reach further into health care.
On Friday, groups advocating for stricter antitrust regulations called on regulators to block the iRobot merger, arguing it gives Amazon more access into consumers’ lives and furthers its dominance in the smart home market.
“The last thing American and the world needs is Amazon vacuuming up even more of our personal information,” said Robert Weissman, president of the progressive consumer rights advocacy group Public Citizen.
“This is not just about Amazon selling another device in its marketplace,” Weissman said. “It’s about the company gaining still more intimate details of our lives to gain unfair market advantage and sell us more stuff.”
Landmark antitrust legislation targeting Amazon and other Big Tech companies has languished for months in Congress as prospects for votes by the full Senate or House have dimmed.
Last month, Sen. Amy
Klobuchar, D-Minn., who heads the Senate Judiciary antitrust panel, urged the the Federal Trade Commission to investigate the One Medical acquisition, in the mold of other critics who’ve called on regulators to block the purchase over concerns about Amazon’s past conduct and potential implications for consumers’ health data. Regulators also have discretion to challenge Amazon’s $8.5 billion buyout of Hollywood studio MGM, which was completed earlier this year.
Founded in 1990 by a trio of Massachusetts Institute of Technology roboticists, including Angle, iRobot’s early ventures led to rovers that could perform
PLENTY OF SPACE
The 44-year-old Seth Cohen just sold his waterfront Fort Lauderdale home in search of a more private, residential estate. He bought a multi-million dollar house in Southwest Ranches where he can have more privacy, and his four kids can have plenty of space for basketball courts and ATV tracks.
“My kids wanted to have a playground,” Cohen said. “There’s nowhere else that you can get that kind of land in Broward or Dade.”
Southwest Ranches is known for its mansions with ornate gates, longwinding driveways, large plots of land and grazing horses.
“Miami is chaotic. The traffic and population are too crazy for most people,” Cohen said. “If people are spending money and are family people, I can see why they would want something like Fort Lauderdale. It’s not as fast-paced.”
BENEFITS FOR BUSINESS
Long-time Broward residents and small business owners celebrate the influx of wealthy buyers, including Brian Blouin, a charter broker for Miamibased yacht rental YachtLife. “We’re seeing a doubling of our chartering compared to last year,” he said.
“I have seen an increase of local clients versus last year. This year we had a lot of clients call to relocate their yachts from storage and pull into their backyard docks from their new homes.”
Blouin manages the Fort Lauderdale inventory and has seen an increase in demand for newer and bigger yacht models than in previous years, and has had to find new inventory military and disasterrelief tasks in the aftermath of the Sept. 11 attacks.
The profits from defense contracts allowed iRobot to experiment with a variety of other robots, producing some duds and one huge commercial success: the first Roomba, introduced in 2002, which pioneered the market for automated vacuum cleaners.
The company spun off its defense robotics division in 2016 to become almost exclusively a seller of vacuums and some other home robots, such as the Braava robotic mop. It planned to launch a robotic lawn mower in 2020 but backed off, citing problems tied to the pandemic.
‘‘ MIAMI IS CHAOTIC. THE TRAFFIC AND POPULATION ARE TOO CRAZY FOR MOST PEOPLE. Seth Cohen, Southwest Ranches homeowner
to match the demand in Broward.
Other business owners are benefiting from wealthy transplants. Reuben Ezekiel, 55, owns and runs Fountains Jewelers, a store in Plantation that specializes in buying and selling high-end jewelry. Ezekiel has had so many new clients that he no longer has to advertise.
His typical clients are locals, usually from Hawks Landing and Southwest Ranches, people who have moved there because they can get bigger homes for their families than they can in Miami.
“Now people don’t even sell us any jewelry, they’re just coming in to buy.” Ezekiel doesn’t recall a similar change in client behavior in over 33 years of running his business.
More wealthy buyers are expected in Broward and Miami-Dade in the coming months.
Out-of-towners are forecast to move to South Florida given the steady stream of corporate expansions. Still, demand falls short of 2021 due to rising interest rates, low supply and a rocky stock market. Gone are the days of long lines and listings selling within 72 hours.
“People are reading on the news that the market is getting softer. They want to wait. They still want a good deal,” said Michele Tabb, Realtor for the brokerage firm LoKation Real Estate.
“The richest people want the good deal,” she said. “They want a good value. No one wants to feel like they’ve been taken advantage of.”
Rebecca San Juan: 305.376.2160, @rebecca_sanjuan Daniel Oropeza: DanielOropeza92