iRobot Files for Chapter 11 Bankruptcy and to be Acquired by Chinese Supplier Picea Robotics
iRobot, the maker of the Roomba vacuum cleaner, has filed for Chapter 11 bankruptcy protection in Delaware and will be acquired by a subsidiary of Picea Robotics, a Chinese supplier.
The restructuring plan aims to keep iRobot as a going concern, maintaining commitments to employees and ensuring full payments to vendors and other creditors. Operations including the app, supply chains, and product support are not expected to be disrupted.
Picea’s Hong Kong subsidiary has acquired the remainder of iRobot’s debt. Notably, three years earlier Amazon had offered to buy iRobot for $1.4 billion, but the deal was blocked by EU competition authorities. iRobot received $94 million in compensation for that collapsed Amazon deal, which it used to pay advisory fees and repay part of a Carlyle loan.
CEO Gary Cohen stated that the deal would combine iRobot’s consumer-driven design and research and development with Picea’s manufacturing and technical expertise to shape the next era of smart home robotics.
iRobot’s earnings have been under pressure due to supply chain issues and competition from cheaper rivals. The company posted a net loss of $145.5 million last year and its valuation has dropped dramatically from more than $3 billion in 2021 to about $137 million now.
On Friday, iRobot shares fell more than 13% in New York and have lost about 45% of their market value during the year to date.
The acquisition by a Chinese operator has raised privacy concerns over potential surveillance, given Roomba’s mapping features and its access to detailed home floor plans.
iRobot was founded in 1990 by MIT roboticists, with the Roomba debuting in the early 2000s and many models since offering app-based controls.
