iRobot sells off military robot division

Popular household robot manufacturer iRobot has this month announced that it plans to sell off the military side of its business.

UPDATE 05/04/16

iRobot yesterday announced that it has closed the previously announced sale of its Defense & Security business to Arlington Capital Partners for up to $45m in total consideration, including a contingent payment based on achieving certain milestones. Proceeds from the sale will be used for iRobot’s previously announced $85 million Accelerated Share Repurchase.

As previously announced, the transaction enables iRobot to solidify its position as the leader in diversified Home Robots and focus on technologies for the connected home. A private, standalone company, Endeavor Robotics has been established by Arlington Capital Partners to focus on the defense, public safety and industrial markets.

“The closing of the Defense & Security business sale marks a new beginning for iRobot as we put our full focus on the home,” said Colin Angle, chairman and CEO of iRobot. “Successful new product introductions including Braava jet and Roomba 980 point to significant growth opportunities in the consumer robotics market. We look forward to capitalizing on our home-focused strategy through new consumer products and technologies for the connected home, continued expansion in key international markets including China, and increased investment in global marketing campaigns.”

ORIGINAL ARTICLE PUBLISHED 15/02/16

Previously, the US based company had a well established ‘Defence and Security’ division producing robotic systems for the US military as well as police.

This division manufactured a number of different robotic systems, mostly intended for risky tasks like bomb disposal and hazardous environment operations.

iRobot’s Defense and Security division was sold to Arlington Capital Partners for a total price of $45m.

Arlington Capital Partners themselves are a private equity firm specializing in “high growth” areas including aerospace, defense, government services and technology.

“In the spring of 2014, we engaged […] to review strategic alternatives for our Defense and Security business,” said Colin Angle, iRobot chairman and CEO.

“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 sale is expected to be completed within the next few months. So far there is no information on any potential post-sale job losses or managerial shake-up with the Defense and Security division.

Nonetheless Arlington has said that it will continue on with the development of iRobot’s military systems, with plans to produce robots as small as 5 pounds in weight, up to large 300 pound robots.

Military robots bad for PR

Comments by iRobot following the announcement of the sale hint at a possible motivation for selling its military division – namely that it doesn’t fit well with its primary brand position.

The company, which is well known for its Roomba line of robotic vacuum cleaners of which it has sold 14 million units over the past decade, is likely uncomfortable with the negative associations of military robots.

“The divestiture of the Defense & Security business will allow us to focus on the Home. […] We are confident that our strategy […] will position iRobot for continued growth and success,” said Colin Angle.

While none of its defense products are armed, the growing public backlash against militarized robots would likely hurt perceptions of the company as a ‘safe’ household appliance brand.