IRobot Pushes Deeper Into Japan With $14M+ Purchase of Distributor

Xconomy Boston — 

IRobot will take over the direct sales and distribution of its consumer robotics products in Japan after inking an agreement to acquire the iRobot-related distribution business of its Tokyo-based partner, Sales On Demand Corporation (SODC).

The cash deal is valued between $14 million and $16 million, and primarily includes product inventory, iRobot said. SODC employees who worked in the distribution of iRobot (NASDAQ: IRBT) products will join the Bedford, MA-based company after the deal closes, which is expected to occur in April.

Outside of North America, Japan is the largest market for consumer robotics, according to an iRobot press release. In 2004, SODC became the exclusive distribution partner in Japan for iRobot products, which include Roomba vacuum cleaners. SODC helped iRobot grab a “significant market share in an increasingly competitive region,” iRobot said.

But iRobot leaders think the company can grow its business in Japan by taking direct control of sales, marketing, branding, “channel relationships,” and customer service.

“The Japanese distribution model served us well in establishing our initial presence and brand in the region, catapulting iRobot to the market-leading position,” CEO Colin Angle said in the press release. “As the dynamics of the robotic floor care segment evolve in Japan, we believe iRobot itself is better positioned to drive increased adoption and continue market leadership in that region.”

IRobot said it expects the acquisition to boost its 2017 revenue by $20 million to $25 million.

The company said it will appoint a new president and general manager of its Japan business, who will report to iRobot chief operating officer Christian Cerda.