Robot Vacuum Roomba Maker Files for Bankruptcy After 35 Years

(Bloomberg) — iRobot Corp. has agreed to take control of the consumer robot maker from its main supplier and lender, Shenzhen PICEA Robotics Co. and Santrum Hong Kong Co., filed for bankruptcy after reaching a restructuring support agreement.

The Massachusetts-based company filed for Chapter 11 bankruptcy in the District of Delaware on Dec. 14, according to a news release.

As part of the restructuring, vacuum cleaner manufacturer Shenzhen PICEA will acquire all shares in the reorganized company. Under the proposed Chapter 11 plan, the company’s common shares would be destroyed.

The plan will allow the debtor to maintain continuity and continue to meet its commitments to employees and make timely payments to vendors and other creditors for amounts owed throughout the court-supervised process, iRobot said.

“Today’s announcement marks a significant milestone in securing iRobot’s long-term future,” iRobot Chief Executive Officer Gary Cohen said in a statement.

The company warned of potential bankruptcy in December after years of earnings. At the time, Shenzhen PICEA had purchased most of its debt from US investor Carlyle Group Inc., and iRobot had stated that it was in talks to provide new capital and pay down outstanding debt.

Founded in 1990 by three MIT engineers, iRobot has evolved over more than three decades. It achieved significant early success, selling more than 50 million robots, according to its website. Earnings have started to decline since 2021 due to supply chain disruptions and increased competition.

Amazon.com’s acquisition, which was hoped to happen in 2023, collapsed due to regulatory concerns.

More stories like this available Bloomberg.com