(Bloomberg/Reshmi Basu and Dorothy Ma) — iRobot Corp., the company that revolutionized robot vacuum cleaners in the early 2000s with its Roomba model, filed for bankruptcy and proposed handing over control to its main Chinese supplier.
The Massachusetts-based consumer robot maker, which is currently listed, will be taken over by China’s Shenzhen PICEA Robotics Co. and a subsidiary of the Chinese firm, according to a press release. The common stock of the company, founded in 1990 by engineers from the Massachusetts Institute of Technology, will be wiped out under the proposed Chapter 11 plan filed in Delaware on Sunday.
iRobot enjoyed initial success with the Roomba that it debuted in 2002 and which quickly became synonymous with autonomous vacuum cleaners. But earnings at the firm, which has sold more than 40 million home robots, began to decline in the post-Covid era, hit by supply chain issues and cheaper competitors. The firm warned of potential bankruptcy earlier this month.
In 2022, Amazon.com made an offer that would have turned the company’s fortunes, but it collapsed over a clash with European Union competition authorities.
iRobot received more than $90 million in compensation for the failed deal, but part of it was used to pay advisory fees and to repay a portion of a $200 million loan extended by Carlyle Group Inc. as a bridge while the Amazon transaction closed. Last month, Shenzhen PICEA subsidiary Santrum Hong Kong Co. acquired the $191 million of outstanding debt in principal and interest from the US investment firm, and PICEA has been in talks with iRobot since then to secure new capital and address the outstanding debt.
The bankruptcy plan will allow iRobot to remain as a going concern and continue to meet its commitments to employees and make timely payments in full to vendors and other creditors for amounts owed throughout the court-supervised process, the company said in a statement. In the filing, the company listed between $100 million and $500 million of assets and liabilities.
–With assistance from Irene García Pérez.
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