Online retailer Amazon and robot vacuum developer iRobot have announced an amendment to the existing terms of their merger agreement, wherein the former will pay a reduced price to reflect the robot maker’s recent debt increase.
The Roomba maker’s share prices are expected to decrease due to increases in its debt, after it recently received a US$200m (£154.2m) loan from global private equity fund Carlyle to fund its operating costs.
The amended terms mean Amazon will now pay US$51.75 (£39.88) per share, revised from the previous price of US$61.00 (£47.01) per share. The initial US$1.7bn (£1.3bn) purchase price was agreed last year.
“We’ve reached an amended agreement with Amazon that reflects the incurrence of iRobot’s new debt,” said Colin Angle, chairman and CEO of iRobot.
“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.
“This new financing is the outcome of a thorough process and represents the best terms reasonably obtainable on additional financing to support our operations.”
Last month, the UK’s Competition and Markets Authority (CMA) approved Amazon’s purchase of iRobot.
The transaction, however, is not yet completed. This remains subject to certain closing conditions, regulatory approvals and approval of the amended merger agreement by iRobot’s stockholders.
Earlier this month, the European Commission opened an in-depth investigation to examine the acquisition, under the EU Merger Regulation, after expressing concerns the company would restrict competition for robotic vacuum cleaner developers in the region.