Amazon and iRobot have agreed to a 15% reduction in Amazon’s acquisition price to offset a new $200 million loan necessary to fund the Roomba robotic vacuum-cleaner maker’s ongoing operations.
The news comes almost a year after Amazon agreed to acquire iRobot in a deal valued at $1.7 billion, part of a broader push by the Seattle-based tech giant to expand its footprint in consumer robotics.
Antitrust authorities in the U.S. and Europe are scrutinizing the deal. The companies said in a statement Tuesday morning that they are “working cooperatively with the relevant regulators in their review of the merger.”
Growing competition and the changing economy are taking a toll on iRobot.
- Revenue fell 24% in 2022, to $1.2 billion, with a net loss of $286 million, compared with profits of $30 million in 2021 and $147 million in 2020.
- Total shipments declined 25% to less than 4.2 million units in 2022.
- The Bedford, Mass.-based company has been through two rounds of layoffs, cutting 216 jobs, or about 16% of its workforce, reducing its total employee base to 1,156 people as of April of this year.
For the first quarter of this year, iRobot said in a regulatory filing that its revenue declined 45% due in part to “a scheduled shift of certain orders with a customer which occurred in the first quarter of 2022 and are scheduled to ship in the second quarter of 2023 for their annual promotional event.”
The filing didn’t identify the customer. Roomba and its competitors were heavily promoted during Amazon Prime Day, which took place earlier this month.
Under the revised terms of the proposed all-cash acquisition, Amazon will pay $51.75 per share for iRobot, vs. $61 per share when the deal was announced. They say the reduced cash outlay will be “largely offset” by the increase in iRobot’s debt.
“iRobot is taking on new financing that we believe is sufficient to support our operations in a hyper competitive environment and meet our liquidity needs as well as pay off iRobot’s existing debt,” iRobot CEO Colin Angle said in a statement. “This new financing is the outcome of a thorough process and represents the best terms reasonably obtainable on additional financing to support our operations.”
Shares of iRobot fell 12% in trading Tuesday morning.
