The US company behind the Roomba robot vacuum cleaner has filed for bankruptcy protection and agreed to be taken over by one of its Chinese suppliers.
iRobot, which is best known for debuting the Roomba vacuum cleaner in the early 2000s, will be taken over by a subsidiary of its main supplier, Picea Robotics.
The Roomba maker, which is listed in the US, said it had filed for Chapter 11 bankruptcy in Delaware as part of a restructuring agreement with Picea.
iRobot’s earnings have come under pressure in recent years, hit by supply chain problems and the rise of cheaper competitors. The company warned earlier this month that it could face bankruptcy.
The iRobot chief executive, Gary Cohen, said the deal with Picea would strengthen the company’s financial position.
“By combining iRobot’s innovation, consumer-driven design, and research and development 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,” he said.
The deal with Picea comes three years after Amazon first offered to buy iRobot at a valuation of $1.4bn (£1.1bn), as part of an effort to bolster its portfolio of consumer technology products such as its Alexa smart speakers and Ring doorbells.
However, the deal ultimately fell through over a clash with competition authorities in the EU.
iRobot received $94m in compensation for the collapse of the deal, but part of this was used to pay advisory fees and repay a portion of a loan from the private equity group Carlyle. Last month, Picea’s Hong Kong subsidiary acquired the remainder of the debt.
The company’s acquisition by a Chinese company could reignite concerns over surveillance. Amazon’s attempt to buy iRobot raised fears among privacy campaigners that the tech company would have access to floor plans of users’ homes using the vacuum cleaner’s mapping features.
The bankruptcy plan will allow iRobot to remain as a going concern and continue to meet its commitments to employees, make payments in full to vendors and other creditors, the company said in a statement.
iRobot, which was founded in 1990 by three roboticists at the Massachusetts Institute of Technology, helped pioneer robotic products for consumers.
Many recent versions of the Roomba have included features that are controlled through the brand’s app. The company said the bankruptcy filing was not expected to disrupt its app, supply chains or product support.
iRobot, which made a net loss of $145.5m last year, was valued at more than $3bn in 2021 thanks to strong demand for household cleaning products during the pandemic. It is now valued at about $137m.
On Friday, iRobot shares fell by more than 13% in New York. It has lost about 45% of its market value in the year to date.
