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It's annoying that the article doesn't actually explain why they are getting out of the 'warbot business'. 'The big buys are over' does not explain why it is a

It's annoying that the article doesn't actually explain why they are getting out of the 'warbot business'. 'The big buys are over' does not explain why it is a good time to sell the division. If it's true, then it would be a terrible time to sell off a division since you'd get very little money for it. Presumably Arlington Capital Partners think that it is a good business to be getting into, even with the associated chaos and confusion that's inevitable when a company sells off a division of itself. IMO it's also unlikely to be a reputation issue either - not many people know that Roomba also sells to the military, and besides, their robots aren't exactly killbots, they are saving the lives of their users. If anything, it should be a positive role. Perhaps it is because the company wants a single focus? But even then, if a division of your business is large enough to sell and survive on its own, then you should also be able to keep it and run it separately from your house-cleaning division, with no downsides. The shared research and development of both divisions must be an advantage, but the news article doesn't even mention that selling the division would lose these advantages. So tell us again, Washington Post, why is the maker of Roomba vacuums getting out of the warbot business?

apalmer 11y ago
I also found the article to be too vague in explaining what from the headline appears to be the central point of the article. From what little was said seemed like activist investors had decided that they were better positioned as a cleaning product company than as a true bros based robotics company... Guess in the long run this is why google went the Alphabet route.
venomsnake 11y ago
The Pentagon may want to buy something they are against on ethical grounds.
- HillRat 11y ago
  I think it is far more likely that the problem is that the Pentagon doesn't want to buy enough platforms -- weaponized or not -- to make the market worth their time. Better to sell off 1/16 of the business for some free cash flow and focus on the larger consumer market. After all, iRobot began as a DARPA contractor and already experimented with weaponized remote platforms; they aren't averse to making tools for war, they just obviously don't see enough cash in it.
  - apalmer 11y ago
    This is what I am getting from the article but seems very short sighted... Working on development and R&D with the government is more likely to enable IRobot to be competitive in the real robotics industry that is finally springing up in the next decade or ao
rjdagost 11y ago
It says in the article that activist investors (Red Mountain Capital Group) pushed for the breakup. The defense business wasn't growing fast enough for the pump and dump traders. It's a textbook short-term move: cleave off the slow and stable part of the business, get a higher multiple for the remaining faster growing part of the business. Just make sure you exit your position before the high growth portion of the business slows. Then you will wish you had an anchor of stability...
JoeAltmaier 11y ago
America's wartime footprint grew smaller. You can't grow a business in a shrinking market. Essentially the govt/military market is too erratic for sustained business growth. Anyway that's what the employees at Roomba said when I was interviewing.
grogen 11y ago
As a data point, from their last annual report: "Our home robots revenue represented 91% of our total 2014 revenue compared to 88% in 2013. We anticipate that our revenue for the next few years will be primarily driven by our rapidly growing home technology business and that our home robots revenue will comprise approximately 90% of our total revenue in the near term" It appears that they do not expect too much revenue in that area any time soon.

apalmer 11y ago

I also found the article to be too vague in explaining what from the headline appears to be the central point of the article. From what little was said seemed like activist investors had decided that they were better positioned as a cleaning product company than as a true bros based robotics company... Guess in the long run this is why google went the Alphabet route.

venomsnake 11y ago

The Pentagon may want to buy something they are against on ethical grounds.

HillRat 11y ago
I think it is far more likely that the problem is that the Pentagon doesn't want to buy enough platforms -- weaponized or not -- to make the market worth their time. Better to sell off 1/16 of the business for some free cash flow and focus on the larger consumer market. After all, iRobot began as a DARPA contractor and already experimented with weaponized remote platforms; they aren't averse to making tools for war, they just obviously don't see enough cash in it.
- apalmer 11y ago
  This is what I am getting from the article but seems very short sighted... Working on development and R&D with the government is more likely to enable IRobot to be competitive in the real robotics industry that is finally springing up in the next decade or ao

rjdagost 11y ago

It says in the article that activist investors (Red Mountain Capital Group) pushed for the breakup. The defense business wasn't growing fast enough for the pump and dump traders. It's a textbook short-term move: cleave off the slow and stable part of the business, get a higher multiple for the remaining faster growing part of the business. Just make sure you exit your position before the high growth portion of the business slows. Then you will wish you had an anchor of stability...

JoeAltmaier 11y ago

America's wartime footprint grew smaller. You can't grow a business in a shrinking market. Essentially the govt/military market is too erratic for sustained business growth. Anyway that's what the employees at Roomba said when I was interviewing.

grogen 11y ago

As a data point, from their last annual report: "Our home robots revenue represented 91% of our total 2014 revenue compared to 88% in 2013. We anticipate that our revenue for the next few years will be primarily driven by our rapidly growing home technology business and that our home robots revenue will comprise approximately 90% of our total revenue in the near term" It appears that they do not expect too much revenue in that area any time soon.