iRobot (IRBT.US) saw its stock plunge nearly 34% on Monday after the company warned of significant setbacks in its search for a buyer, leaving its financial condition precarious. The Roomba vacuum maker has been seeking a sale since March this year, but according to a regulatory filing, the last remaining potential buyer withdrew after an "extended period of exclusive negotiations."
The company's outlook has remained uncertain since Amazon abandoned its $1.7 billion acquisition plan in January 2024, citing regulatory hurdles. Amazon CEO Andy Jassy called the regulators' intervention a "regrettable story," arguing that the deal would have helped iRobot scale and compete against rapidly emerging rivals.
Since then, iRobot has struggled to generate cash flow and repay debt. In March, the company warned of "substantial doubt" about its ability to continue as a going concern. On Monday, iRobot disclosed that the final bidder's offer per share was "significantly below" its recent stock price. Year-to-date, iRobot shares have fallen more than 50%.
The company stated in the filing: "At this time, we are not engaged in any substantive discussions with potential acquirers or strategic partners. As a result, we cannot guarantee that the strategic review process will result in any transaction or outcome."
In July 2023, iRobot secured a $200 million loan from Carlyle to sustain operations pending the Amazon deal. The company has now extended waivers on certain financial obligations until December 1. However, it warned that if lenders refuse additional funding or alternative financing isn’t secured soon, iRobot "may be forced to significantly curtail or cease operations and would likely seek bankruptcy protection."
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