In its second major acquisition in almost as many weeks, Amazon announced its purchase of iRobot Corporation. The all cash deal valued at $1.7 billion promises to bring the Roomba and iRobot’s other home devices under Amazon’s control. On the heels of its acquisition of One Medical on July 21st, Amazon has left some analysts questioning the privacy implications of the buying spree while others praise the company’s savvy for buying up company while valuations are lower.
In a joint press release, Amazon Devices senior vice president Dave Lim applauded the deal, writing “Over many years, the iRobot team has proven its ability to reinvent how people clean with products that are incredibly practical and inventive from cleaning when and where customers want while avoiding common obstacles in the home, to automatically emptying the collection bin.” Analysts have linked the acquisition to Amazon’s strategy – announced at its Alexa Live event last month – of focusing on ambient intelligence to optimize customers’ daily lives.
Whether a client uses Amazon’s Alexa to turn on music, smart switches to turn on the lights, or a Roomba to clean her floors, Amazon stated, “Our goal is to build technology that allows customers to spend more time looking at the world and interacting with people.” Still others view Amazon’s extending reach with concern.
Data privacy analysts have warned that this latest acquisition “may be the most dangerous, threatening acquisition in the company’s history.” They point to Roomba’s household mapping technology. Historically, iRobot devoted significant resources to robotics contracts with the United States military before shifting to automated vacuums. This helps fuel concerns that Amazon will harness maps of consumers’ homes, in addition to the volumes of private information Amazon already has.
As Ben Winters, head of AI and Human Rights Project and Electronic Privacy Information Center, explains, “If you think of that in combination with a Ring doorbell, spending habits, home network activity, your Whole Foods order, it’s this next level of having an ability to know everything about not just what your habits are, but about your home.”
Source: https://www.cnbc.com/2021/06/18/as-e-commerce-sales-proliferate-amazon-holds-on-to-top-online-retail-spot.html
Such concerns are exacerbated by the timing of the acquisition, right on the heals of acquiring One Medical. This adds individuals’ primary care information to Amazon’s dataset. Even prior to announcing this deal with iRobot, Sen. Joshua Hawley (R-Mo.) swiftly urged the Federal Trade Commission to investigate the acquisition for antitrust violations, warning of “dystopian corporate ‘nudging.’” Whether these concerns are well-founded or the rapid, large acquisitions are merely an efficient use of cash remains to be seen.
According to Matterhorn’s M&A database, which harnesses both AI and attorneys to digest the granular deal points of publicly announced transactions. iRobot was advised by law firm Goodwin Procter LLP and financial adviser Qatalyst Partners LP. Amazon was advised again by Paul, Weiss, Rifkind, Wharton & Garrison LLP, and financial adviser Goldman Sachs & Co. LLC.