iRobot to Sell its Defense and Security Business

iRobot 710 Kobra

iRobot® 710 Kobra™

In a press release yesterday, iRobot, maker of the impossibly cute Roomba robot vacuum cleaners, announced that they are emancipating their Robot Defense & Security (D&S) unit. The yet-to-be-named new company will continue to serve the current D&S market of defense, law enforcement, and industrial organizations. The existing D&S management team will continue to lead the new company. Financial backing to the tune of $45 million will be provided by Arlington Capital Partners.

From the release:

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.

What the release fails to mention is the pressure put on iRobot by their largest shareholder, Red Mountain Capital Partners, to divest themselves of both their S&D and remote presence units. On December 1st, 2015, Red Mountain sent iRobot a “value enhancement plan” that chided iRobot’s “… failure to concentrate its resources in the dominant, high-margin Home Robots business,” at the expense of, “… unprofitable and declining Defense and Security business, its support of a Remote Presence business with no viable business case or discernible growth prospects…” While this recommendation seems myopic to me, iRobot appears to have taken it to heart.

Read iRobots full press release: iRobot Announces Sale of Defense & Security Business to Arlington Capital Partners

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