iRobot will quit making military and police robots and will place more emphasis on the connected home market after announcing it has agreed to sell its Defense & Security business to Arlington Capital for up to $45 million in total consideration.
Once officially sold, the division will operate independently as a provider of ground-based robots for the U.S. Department of Defense, and will have “a significant and growing global presence in the security, industrial and international defense markets,” Arlington Capital said.
iRobot believes the sale of its Defense & Security business will allow it to place greater attention on the consumer market, specifically home robotics and other 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,” said iRobot Chairman and CEO Colin Angle. “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.”
Several iRobot Defense & Security veterans have been tapped to run the new company, including Sean Bielat, a former executive at iRobot Defense & Security who will act as CEO. The current senior V.P. of iRobot Defense & Security, Tom Frost, will become the new company’s president.
“Arlington Capital is pleased to be partnering with the highly talented iRobot Defense & Security team on this divestiture to create a new and focused robotics platform,” said Chris Stallmann, a VP at Arlington Capital. “From weight classes of under 5 to over 300 pounds, we look forward to building upon one of the industry’s broadest and deepest robotics product line offerings.”
The new business will be renamed after the closing of the transaction, which iRobot expects to occur within 90 days of the Thursday announcement. The new business will honor all of the contracts, quotes, and other obligations that it promised to accomplish as a division of iRobot.
