In a move indicative of the recent tumult within the tech industry, Massachusetts-based iRobot, known for its Roomba robotic vacuums, has filed for Chapter 11 bankruptcy protection. Announced yesterday, the company will be sold to Chinese contract manufacturer Shenzhen PICEA Robotics Co., Ltd., pending court approval. NBC Boston reports that this step is part of a restructuring process intended to take the company private.
After the failed acquisition by Amazon due to regulatory issues from the European Union, the sale to Picea represents a significant shift for the vacuum maker, which had previously agreed to a $1.7 billion buyout by Amazon. This move was off last year, a decision that led the e-commerce giant to part with a $94 million termination fee to iRobot. Having endured increased competition and stock price decline, iRobot's CEO Gary Cohen was optimistic, stating, "The transaction will strengthen our financial position and will help deliver continuity for our consumers, customers, and partners," according to a statement obtained by NBC Boston.
Facing challenges that culminated in the bankruptcy declaration, iRobot shared that despite the financial restructuring, it anticipates no disruptions to its day-to-day operations. Services such as app functionality, customer programs, global partners, supply chain relationships, or ongoing product support should remain unaffected. The Bedford company was proud to have debuted the Roomba in 2002 as the first household robotic vacuum and carved a niche for itself in the public sphere when it went public in 2005. Shares in premarket trading, however, plummeted following the bankruptcy announcement, dropping nearly 70% to a startling $1.31, as per NBC Boston.
The downfall seems to have been precipitated by a warning from iRobot in September, as they disclosed struggles with declining sales and the potential shutdown of some operations. Picea's acquisition appears to safeguard the future of iRobot's products and services, with reassurances extended to consumers that the change in ownership will maintain the status quo. Roomba, the pioneering invention of iRobot, is a product familiar to households worldwide, and customers remain assured of continued support. CBS News Boston noted the company's commitment to operate in the "ordinary course with no anticipated disruption to its app functionality, customer programs, global partners, supply chain relationships or ongoing product support."
