iRobot has filed for bankruptcy

iRobot Corp – perhaps most famous for its Roomba robot vacuum cleaners – has filed for bankruptcy. The company has proposed that control be handed over Shenzhen PICEA Robotics Co, its main Chinese supplier.

The Chapter 11 process comes after iRobot has been under increasing pressure from various tariffs, as well as competition from lower-cost rivals. There should be – at least initially – no disruption to the company’s operations, apps should continue to function as normal, and supplies are not expected to be impacted.

Making the announcement, iRobot said that “it entered into a Restructuring Support Agreement (the "RSA") with its secured lender and its primary contract manufacturer, Shenzhen PICEA Robotics Co., Ltd. and Santrum Hong Kong Co., Limited, (collectively "Picea") for Picea to acquire iRobot through a court-supervised process. This agreement represents a critical step toward strengthening iRobot's financial foundation and positioning the Company for long-term growth and innovation”.

The company continues:

To efficiently implement this transaction, iRobot and certain of its affiliates voluntarily commenced a pre-packaged chapter 11 process in the District of Delaware (the "Court"). The Company expects to complete the pre-packaged chapter 11 process by February 2026.    

Under the terms of the RSA, Picea will receive 100% of the equity interests in the Company, which will delever the Company's balance sheet and enable iRobot to continue operating in the ordinary course, pursue its product development roadmap, and maintain its global footprint. The transaction contemplated under the RSA provides a path forward to enhance financial stability, reduce debt, and support continued innovation across iRobot's leading portfolio of robotics and smart home devices.

In a statement about the move, Gary Cohen – Chief Executive Officer of iRobot – said:

Today's announcement marks a pivotal milestone in securing iRobot's long-term future. The transaction will strengthen our financial position and will help deliver continuity for our consumers, customers, and partners. Together, we will work to continue advancing the industry-leading Roomba robots and smart home technologies that have defined the iRobot brand for more than three decades. 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.

iRobot says that the proposals it has put forward for court approval should allow it to emerge in a stronger position. It says:

Upon completion of the transaction, iRobot will be a private company wholly owned by Picea, and its shares of common stock will no longer be listed on The Nasdaq Stock Market LLC or any other national stock exchange. The transaction is designed to deliver a more stable balance sheet and renewed ability to invest in its next generation of robotics, smart home innovations, and customer experience enhancements.

The Company expects that holders of the Company's common stock will not receive any equity of the reorganized Company, and that all issued and outstanding equity interests in the Company will be cancelled and holders of common stock will experience a total loss and not receive recovery on their investment, if the chapter 11 plan is approved by the Court.