It's official: Amazon (AMZN 3.43%) has ended its pursuit of iRobot (IRBT 13.15%) more than a year after striking a deal to buy the company for $61 per share and ultimately agreeing to pay $51.75 per share after iRobot took on debt to fund operations.
This isn't entirely surprising given Amazon said it won't concede changes requested by the European Union. This likely ended any chance the E.U. would approve the merger.
Amazon walks away, and iRobot charts a path forward
There's no doubt this is a big blow to iRobot. Shares now trade for about 30% of the acquisition price, and investors need to reassess the business.
As part of the agreement, Amazon will pay the $94 million termination fee originally agreed to. That will bolster iRobot's balance sheet, which had $189.6 million in cash and $204.4 million in debt at the end of the third quarter of 2023.
iRobot faces a crisis in its operations, though. Net loss over the first three quarters of 2023 was $241.1 million, and operations burned $113.6 million during that time. To survive, the company announced some major changes.
iRobot restructures, and the founder departs
A restructuring plan announced today includes $80 million to $100 million in savings from renegotiating design and manufacturing deals. There will also be $20 million in cuts to research and development expenses, $30 million in cuts to marketing expenses, and a reduction in the real estate footprint. In total, 350 jobs, or 31% of the workforce, will be cut.
Founder Colin Angle is also stepping down as CEO and will leave after a 12-month senior advisor agreement concludes. Glen Weinstein will serve as interim CEO until a permanent replacement is found.
And with that, one chapter ends for iRobot and another much more uncertain one begins.
