iRobot Files for Bankruptcy, Taken Over by Subsidiary of Chinese Supplier Picea Robotics
iRobot has filed for Chapter 11 bankruptcy in Delaware as part of a restructuring plan with its main supplier, Picea Robotics. The company will be taken over by a subsidiary of Picea, a Chinese firm. CEO Gary Cohen stated that the deal would strengthen iRobot by combining its innovation with Picea’s manufacturing and technical expertise.
Previously, Amazon had offered to buy iRobot for $1.4 billion three years earlier; however, the bid collapsed due to competition concerns raised by the European Union. iRobot received $94 million in compensation from the failed Amazon deal. Some of this amount was used to pay advisory fees and repay a Carlyle loan, while last month Picea’s Hong Kong subsidiary acquired the remainder of the debt.
The bankruptcy plan will enable iRobot to continue operating as a going concern, fulfilling commitments to employees and paying vendors and other creditors in full. Last year, iRobot posted a net loss of $145.5 million. The pandemic-era demand had previously boosted its value to over $3 billion in 2021, but it is now valued at about $137 million. Its shares fell more than 13% in New York on Friday and are down about 45% for the year.
The acquisition by a Chinese company has raised privacy concerns over potential surveillance due to Roomba’s mapping features, echoing earlier fears that Amazon’s bid would grant access to detailed home floor plans.
