Amazon.com is acquiring iRobot, maker of the Roomba automatic vacuum cleaner, for about $1.7 billion, as it seeks to expand its “basket” of smart home appliances.
Amazon will pay $61 per share, valuing the maker at a 22% premium to the stock’s last closing price of $49.99. After the acquisition announcement, iRobot’s stock rallied about 20%.
The deal comes at a time when analysts expect cash-rich tech companies to engage in a barrage of mergers and acquisitions to take advantage of depressed valuations due to growth pressures. Amazon currently has more than $37 billion in cash and cash equivalents.
If the deal falls apart, Amazon will have to pay iRobot $94 million in damages.
Upon completion of the deal, Colin Angle will remain CEO of iRobot.