Roomba maker iRobot has filed for bankruptcy and will be taken over by its Chinese supplier after the company that popularized the robot vacuum cleaner fell under the weight of competition from cheaper rivals.
The US-listed group on Sunday said it had filed for Chapter 11 bankruptcy in Delaware as part of a restructuring agreement with Shenzhen-based Picea Robotics, its lender and primary supplier, which will acquire all of iRobot’s shares.
The deal comes nearly two years after a proposed $1.5 billion acquisition by Amazon fell through over competition concerns from EU regulators.
Shares in iRobot traded at about $4 a share on Friday, well below the $52 a share offered by Amazon.
“Today’s announcement marks a pivotal milestone in securing iRobot’s long-term future,” said Gary Cohen, iRobot’s chief executive. “The transaction will strengthen our financial position and will help deliver continuity for our consumers, customers and partners.”
Founded in 1990 by engineers from the Massachusetts Institute of Technology, iRobot helped introduce robotics into the home, ultimately selling more than 40 million devices, including its Roomba vacuum cleaner, according to the company.