Amazon Cuts iRobot Offer Price to $1.4B

Amazon will now pay a lower price for iRobot after the Roomba vacuum maker entered a $200 million financing facility, knocking down its stock price by about 10% on Tuesday.

According to Bloomberg, the financing arrangement represents a senior secured loan. Moreover, asset manager Carlyle Group, under its private credit arm, provided the loan, which carries an approximately 14% floating interest rate.

The companies had originally agreed that Amazon would pay $61 per share, but it has now been revised to $51.75. The 15% price reduction will bring the total cost down from $1.7 billion to roughly $1.4 billion, including debt.

The reason is the persistent antitrust headwinds companies have suffered both by US and UK regulators, which appears to have hit iRobot’s revenue stream and consequently the need for a credit facility.

Amazon said the price change is expected to be largely offset by the planned increase in iRobot’s net debt under the new financing facility, which is to fund ongoing operations.

“iRobot is taking on new financing that we believe is sufficient to support our operations in a hyper-competitive environment and meet our liquidity needs as well as pay off iRobot’s existing debt,” iRobot chairman and CEO Colin Angle said.

iRobot was founded in 1990 by M.I.T. roboticists. It is best known for its robot vacuum, which it introduced in 2002.