Dive Brief:
- iRobot Corp., a maker of robotic vacuums and mops, filed for Chapter 11 bankruptcy on Sunday in an effort to reduce its debt load and restructure to become a private company.
- The Massachusetts-based company notified investors that it entered into an agreement to be acquired by secured lender and primary contract manufacturer Shenzhen Picea Robotics Co. through a court-supervised process.
- If approved, Picea would receive all of iRobot’s equity interests under the deal’s terms, improving the financially distressed company’s balance sheet for future operations. iRobot said it expects to complete the Chapter 11 process by February 2026.
Dive Insight:
The Roomba and Braava maker is making this move following a multi-year market downturn and failed acquisition by Amazon. iRobot’s full-year revenue peaked in 2021 at nearly $1.6 billion, driven in part by pandemic-fueled demand. The company debuted its first Roomba vacuum in 2002, and has since sold millions of robots worldwide. However, sales in recent years have declined due to supply chain issues and growing competition from international companies.
In August 2022, Amazon sought to acquire the company for $1.7 billion, offering a potential lifeline. The deal ultimately collapsed in January 2024 following regulatory scrutiny in the European Union. By the end of 2024, iRobot’s full-year revenue deteriorated to $681.8 million.
In March, the company raised doubt to investors about its ability to continue as a “going concern,” citing a recent history of losses and negative cash flows. At the time, iRobot said its board of directors was exploring a potential sale or path to refinance the company’s debt. It also had transitioned to a single contract manufacturer, Picea, located in China and Vietnam.
If the restructuring agreement is approved and completed, iRobot will be fully owned by Picea and its shares will no longer be listed on the Nasdaq stock exchange. Current shareholders will not receive any equity in the reorganized company, according to the agreement.
“Today’s announcement marks a pivotal milestone in securing iRobot’s long-term future,” CEO Gary Cohen said in a statement Sunday. “The transaction will strengthen our financial position and will help deliver continuity for our consumers, customers, and partners.”
During the Chapter 11 process, iRobot said it will continue operating “in the ordinary course with no anticipated disruption” to its app functionality, customer programs, global partners and supply chain relationships. The company filed motions with the Delaware court allowing it to pay employees, vendors and creditors in full for amounts owed before, during and after the bankruptcy process.
iRobot’s debt and assets totaled $480.3 million as of June 28, according to the company’s bankruptcy filing. Picea is iRobot’s largest creditor, with an unsecured claim valued at $98.9 million.
“By combining iRobot's innovation, consumer-driven design, and R&D with Picea's history of innovation, manufacturing, and technical expertise, we believe iRobot will be well equipped to shape the next era of smart home robotics,” Cohen said.
