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Bedford, Mass.-based iRobot ( IRBT ) is selling its defense and security robot business to a private equity firm so it can focus on its core home robot business, best known for the Roomba vacuum cleaner. Arlington Capital Partners of Chevy Chase, Md., agreed to pay up to $45 million for the division, which makes four classes of robots: the FirstLook, SUGV, PackBot and Kobra. Those robots are used by the U.S. military and other organizations for reconnaissance, bomb disposal and other critical missions. The deal includes contingent payments based on the unit achieving certain milestones. IRobot has been under pressure from activist investor Red Mountain Capital Partners to divest the military robot business to improve its operating focus. The transaction is expected to close in the next few months. Also Thursday, iRobot reaffirmed its fourth-quarter earnings guidance provided on Oct. 20. It expects results to be at the high end of its previously given range. IRobot is scheduled to report Q4 earnings next Wednesday after the market close. Analysts polled by Thomson Reuters expect iRobot to earn 57 cents a share on sales of $202.6 million. On a year-over-year basis, earnings per share are forecast to rise 84% with sales up 27%. IRobot CEO Colin Angle said the company had a successful holiday season, led by the Roomba 980 Series robot. “Sell-through across iRobot’s Roomba family was greater than we had anticipated in the U.S. despite reported weakness in general retail. Likewise, demand in China was very strong throughout the fourth quarter,” Angle said in a statement . Plus, iRobot said it will expand its current share repurchase initiative by $65 million, including the expected proceeds from the transaction, bringing the total 2016 program to more than $100 million. IRobot stock rose 6.1% to 34.41 on the stock market today . Arlington Capital said the iRobot military robot business will operate as an independent company with a new name. In a statement , Arlington Capital managing partner Peter Manos said his firm will help the new company expand its presence in defense, security and industrial robotics “through organic investment and acquisitions.” Scalper1 News
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