iRobot Corporation (NASDAQ:IRBT), known for its Roomba robot vacuums, has filed for Chapter 11 bankruptcy in Delaware and will be bought by its main lender and manufacturer, Shenzhen Picea Robotics.
The company said the pre-packaged Chapter 11 filing is intended to strengthen its financial foundation, reduce debt, and allow continued operation while pursuing long-term growth and product development. The transaction is expected to be completed by February 2026.
Under the proposed plan, Picea would acquire 100% of iRobot’s equity, resulting in the cancellation of existing shares. Current stockholders are not expected to receive any recovery. Following the acquisition, iRobot will become a privately held company and its shares will be delisted from the Nasdaq.
iRobot CEO Gary Cohen said the transaction “marks a pivotal milestone in securing iRobot’s long-term future” and added that the company will continue developing Roomba robots and smart home technologies under Picea’s ownership.
“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,” Cohen said in a statement. “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."
The company has indicated that day-to-day operations, including product support, app functionality, and supply chain activities, will continue without disruption during the Chapter 11 process. iRobot also filed motions with the court to meet obligations to employees and vendors throughout the restructuring.
Years of competitive pressures, supply-chain challenges, and a failed acquisition by Amazon are seen as factors contributing to the restructuring decision. The company’s Roomba products have faced growing competition from lower-cost alternatives, affecting pricing and profit margins.
Shares of iRobot plummeted 73% on the news to trade at about $1.15.