iRobot Files for Chapter 11, Promises No Service Disruption, and Is Being Bought by Picea After Failed Amazon Deal

iRobot, the maker of Roomba robotic vacuums, has filed for Chapter 11 bankruptcy protection, but the company insists it will continue operating as usual. The announcement came amid a wave of layoffs, shrinking sales, and a steep decline in its stock price, prompting a restructuring plan that could see the firm taken private.

Chapter 11 Filing and Operational Continuity

iRobot said it will continue to operate as normal during the Chapter 11 process and doesn’t expect any disruption to its app functionality, customer programs, global partners, supply chain relationships, or ongoing product support. The Bedford, Massachusetts-based company anticipates completing the prepackaged chapter 11 process by February. The statement underscores that customers should not notice any change in the way their devices operate or in the support services they receive.

Amazon Deal Fallout

In 2022, Amazon announced that it had agreed to buy iRobot for about $1.7 billion, a deal that was called off the following year. Amazon blamed “undue and disproportionate regulatory hurdles” after the European Union signaled its objection to the transaction. The e‑commerce giant later signed an agreement to buy iRobot in an all‑cash transaction valued at approximately $1.7 billion, including iRobot’s net debt. Amazon also agreed to pay iRobot a previously agreed termination fee of $94 million.

Picea Acquisition

iRobot is now being acquired by Picea through a court‑supervised process. Picea, or Shenzhen PICEA Robotics Co., Ltd., is iRobot’s primary contract manufacturer. With facilities in China and Vietnam, Picea has built and sold more than 20 million robotic vacuum cleaners. CEO Gary Cohen said, “The transaction will strengthen our financial position and will help deliver continuity for our consumers, customers, and partners,” in a statement.

Financial Outlook and Share Price

In premarket trading, iRobot shares slid nearly 70% to $1.31. The sharp decline reflects investors’ concerns about the company’s future profitability and the impact of the restructuring. Despite the drop, the firm maintains that its operational capabilities will remain intact during the bankruptcy proceedings.

Key Takeaways

• iRobot has filed for Chapter 11 but pledges no disruption to app, support, or supply chain.
• The failed Amazon acquisition was valued at $1.7 billion, with a $94 million termination fee paid.
• Picea, iRobot’s main contract manufacturer, is taking over the company in a court‑supervised deal.

The transition marks a significant shift for the company that has long been a household name in robotic cleaning. While investors brace for the financial implications, iRobot aims to reassure consumers that their devices will continue to work as expected.