iRobot Corp., a leader in delivering robotic technology-based solutions, announced that it has signed a definitive agreement to sell its Defense and Security business to Arlington Capital Partners for up to $45 million in total consideration, including a contingent payment based on achieving certain milestones. This transaction enables iRobot to solidify its position as the leader in diversified Home Robots and focus on technologies for the connected home.
"In the spring of 2014, we engaged Blackstone Advisory Partners LP, now known as PJT Partners, to review strategic alternatives for our Defense and Security business," commented Colin Angle, iRobot chairman and chief executive officer. "After a thorough and deliberate process, we've concluded the sale of the business to Arlington Capital Partners will maximize shareholder value by allowing us to focus on our much larger Home segment."
The transaction is expected to close in the next few months. The anticipated financial impact of the divestiture, including one-time costs, will be disclosed in iRobot's fourth-quarter and full-year earnings press release and investor call on February 10 and 11, 2016.
2015 Financial Performance
The company has reaffirmed its fourth quarter and full-year 2015 earnings guidance provided on October 20, 2015, and expects fourth-quarter and full-year 2015 results to be at the high end of the range, following a successful holiday season for the new Roomba 980 Series robot. "Sell through across iRobot's Roomba family was greater than we had anticipated in the U.S. despite reported weakness in general retail. Likewise, demand in China was very strong throughout the fourth quarter," said Angle.
"iRobot sees significant growth opportunities in the consumer robotic technology market, particularly in light of the successful Roomba 980 launch and the potential presented by the connected smart home. With 14 million robots in people's homes today and the leading market share within the robotic floor care segment, iRobot has revolutionized the way people clean. The divestiture of the Defense & Security business will allow us to focus on the Home Robots business, bring new products to market, continue our expansion in China and build upon successful new marketing campaigns. We are confident that our strategy of focusing on the home will position iRobot for continued growth and success."
Expanded Buyback Program
Additionally, the iRobot Board of Directors announced that it will expand its current share repurchase initiative by $65 million, including the expected proceeds from the transaction, bringing the total 2016 program to more than $100 million. "We continue our balanced capital allocation practices by returning excess capital to shareholders while maintaining sufficient cash for continued investment in the Home Robot business growth," commented Angle. More information about the expanded repurchase program will also be provided in iRobot's fourth-quarter and full-year earnings press release and investor call.