iRobot Files for Chapter 11 to Facilitate Acquisition by Key Supplier Picea

2025-12-15 companies

Bedford, Monday, 15 December 2025.
On December 14, 2025, iRobot Corporation filed for Chapter 11 bankruptcy in Delaware, initiating a restructuring process that will see the Roomba maker acquired by its primary manufacturer and lender, Shenzhen PICEA Robotics. This filing represents a critical pivot for the Massachusetts-based company, occurring just 11 days after a speculative 74% stock rally driven by political headwinds. The decision follows a tumultuous period marked by the collapse of a $1.7 billion Amazon acquisition in early 2024 and severe liquidity constraints, with cash reserves dwindling to under $25 million by September. Under the agreement, Picea will convert roughly $264 million of debt into 100% equity, effectively taking iRobot private and delisting it from Nasdaq. While the move aims to secure operational continuity and eliminate debt, it signals the end of iRobot’s era as an independent public entity.

The Picea Acquisition Agreement

Under the terms of the Restructuring Support Agreement (RSA), Picea—which serves as iRobot’s primary contract manufacturer—will acquire all equity interests in the reorganized company [1][4]. The transaction is structured to address the company’s substantial liabilities by canceling debt obligations totaling 264 million, comprised of $190 million in prepetition first lien term loans and an additional $74 million in debt owed directly to Picea [2][3]. Upon the transaction’s conclusion, iRobot will transition to a private entity, and its common stock will cease trading on The Nasdaq Stock Market [1].

From Acquisition Hopes to Insolvency

The path to Chapter 11 was paved by the dissolution of a planned merger with Amazon. Initially valued at $1.7 billion, the acquisition was terminated in January 2024 following insurmountable opposition from antitrust regulators in the European Union and the United States [5][7]. Although Amazon paid a $94 million termination fee, the collapse of the deal left iRobot vulnerable to deteriorating market conditions [5]. By the third quarter of 2025, the company’s liquidity had become critical; cash reserves had fallen to $24.8 million as of September 27, a significant decrease from $40.6 million just three months prior [7].

Market Speculation vs. Financial Reality

The bankruptcy filing stands in stark contrast to recent market behavior. Just days prior, on December 3, 2025, iRobot’s stock surged 74% on trading volume exceeding 228 million shares, fueled by a report linking the incoming administration to potential boosts for the robotics sector [6]. This speculative rally proved fleeting against the company’s fundamental insolvency. The valuation metrics illustrate a dramatic erosion of shareholder value: from a market capitalization of $3.56 billion in 2021, the company’s worth plummeted to approximately $140 million by the time of the filing [2].

Operational Outlook

Looking ahead, iRobot expects to complete this court-supervised process by February 2026 [1]. CEO Gary Cohen described the move as a “pivotal milestone” intended to secure the company’s long-term viability [1]. Operations are slated to continue without interruption, ensuring that the production and support of its consumer robotics lines remain unaffected during the restructuring period [1][5].

Sources

Bankruptcy Restructuring