iRobot Files for Bankruptcy, Enters Acquisition by Shenzhen Picea Robotics
iRobot, the manufacturer of Roomba robot vacuums, has filed for bankruptcy. The company cited financial pressures, including debt obligations and tariff costs, as contributing factors. Shenzhen Picea Robotics, iRobot's primary manufacturer based in China, is set to acquire the company. This acquisition is anticipated to ensure the continued functionality of iRobot products.
Financial and Operational Overview
iRobot units are largely produced in Vietnam. The company incurred import fees under previous U.S. trade policies, with its bankruptcy filing indicating $3.4 million in unpaid tariffs owed to U.S. Customs and Border Protection. Additionally, iRobot has reported an approximate $100 million debt to Shenzhen Picea Robotics.
Company History
Founded in 1990 by Massachusetts Institute of Technology researchers, iRobot initially developed devices for diverse applications, including military support, exploration of the Great Pyramid of Giza, and oil spill monitoring in the Gulf of Mexico. The company subsequently introduced consumer-oriented home cleaning devices, such as the Roomba.
Recent Financial Performance
In recent years, iRobot has faced financial challenges, partly attributed to increased competition from international manufacturers offering smart vacuums at lower price points.
A $1.4 billion acquisition offer from Amazon was withdrawn last year following regulatory reviews by European and U.S. competition authorities. This left iRobot with a $200 million loan that had been secured during the merger review period.
The company has consistently reported financial losses. In its most recent quarter, iRobot's U.S. revenue experienced a 33% decline. In March, iRobot had issued warnings about potential bankruptcy, citing concerns related to consumer demand, competitive dynamics, and tariffs.
Acquisition Details
Under the terms of the bankruptcy arrangement, iRobot will transition to a private entity and become integrated within Picea. Shenzhen Picea Robotics manufactures competing household devices under its proprietary brand, 3i, and its website also lists associations with brands such as Shark and Anker, which markets Eufy vacuums.