IRBT stock rockets 20% as Amazon agrees to acquire iRobot for $1.7 billion

iRobot (NASDAQ: IRBT) will be acquired by Amazon (NASDAQ: AMZN) for $61/share in an all-cash deal valued at $1.7 billion, with the stock now up over 19% on the news.

Once customary closing conditions pass, such as approval by IRBT shareholders and regulatory approval, the deal will go through, according to an official announcement on August 5.

Giving his take on the deal, Dave Limp, Senior vice-president of Amazon Devices, said:

“Over many years, the iRobot team has proven its ability to reinvent how people clean with products that are incredibly practical and inventive. 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.”

Meanwhile, iRobot specializes in robots and intelligent home gadgets and innovations, including products that offer cleaning, mapping, and navigation, generating $291.97 million, as per its latest earnings release. 

IRBT chart and analysis

In the last month, IRBT has been trading between $36.35 to $50.88, while remaining in the middle of its 52-week range. Prices have been rising strongly lately, but with the announcement of the deal, they exploded by over 19%, creating a resistance level at $89.83, and a support line at $49.99.

Combined future

Colin Angle, chairman, and CEO of iRobot commented on the passion he and his team had for making customers’’ lives easier, which led to the creation of Roomba, and now in Amazon, they see the perfect partner. 

“Amazon shares our passion for building thoughtful innovations that empower people to do more at home, and I cannot think of a better place for our team to continue our mission. I’m hugely excited to be a part of Amazon and to see what we can build together for customers in the years ahead.”

Despite AMZN shares moving marginally in today’s session, the fact that they are investing in automation and widening their portfolio of products by acquiring a fairly strong player in household robotics indicates that Amazon is looking to dominate yet another field. 

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