iRobot enters bankruptcy after failed Amazon bid and mounting debts

iRobot, the maker of Roomba vacuum cleaners, has entered bankruptcy.

In recent years the company faced competition from cheaper Chinese rivals, including Picea, which pressured sales and forced reductions in headcount. A management shake-up in early 2024 saw the departure of iRobot’s co-founder as chief executive. Amazon proposed buying the company in 2023, citing synergy with its Alexa-powered speakers and Ring doorbells, but EU regulators raised concerns the deal would reduce visibility for rival vacuum brands on Amazon’s website; the companies terminated the agreement little more than a month after Adobe’s $10 billion purchase of Figma was abandoned amid heightened US antitrust scrutiny.

iRobot received $94 million in compensation when the Amazon deal was terminated, though a significant portion went to advisory fees and to repay part of a $200 million loan from private equity group Carlyle. Picea’s Hong Kong subsidiary acquired the remaining $191 million of Carlyle’s debt last month. At the time, iRobot already owed Picea $161.5 million for manufacturing services, nearly $91 million of which was overdue. Alvarez & Marsal is serving as iRobot’s investment banker and financial adviser, and the company is receiving legal advice from Paul, Weiss, Rifkind, Wharton & Garrison.

Key Topics

Business, Irobot, Roomba, Amazon, Picea, Carlyle Group