Case 1:22-cv-08445 Document 1 Filed 10/04/22 Page 1 of 10
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`UNITED STATES DISTRICT COURT
`SOUTHERN DISTRICT OF NEW YORK
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`JON MOORE,
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`Plaintiff,
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`v.
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`IROBOT CORPORATION, COLIN ANGLE,
`MOHAMAD ALI, DEBORAH G. ELLINGER,
`KAREN M. GOLZ, RUEY-BIN KAO, EVA
`MANOLIS, ANDREW MILLER, and
`MICHELLE V. STACY,
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`Defendants.
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`Case No. _____________
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`COMPLAINT FOR VIOLATIONS
`OF THE FEDERAL SECURITIES
`LAWS
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`JURY TRIAL DEMANDED
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`Plaintiff Jon Moore (“Plaintiff”), by and through his undersigned counsel, for his complaint
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`against defendants, alleges upon personal knowledge with respect to himself, and upon
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`information and belief based upon, inter alia, the investigation of counsel as to all other allegations
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`herein, as follows:
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`NATURE AND SUMMARY OF THE ACTION
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`This is a stockholder action brought by Plaintiff against iRobot Corporation
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`1.
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`(“iRobot” or the “Company”) and the members of iRobot’s Board of Directors (the “Board” or the
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`“Individual Defendants”) for their violations of Sections 14(a) and 20(a) of the Securities
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`Exchange Act of 1934 (the “Exchange Act”), 15 U.S.C. §§ 78n(a), 78t(a), and U.S. Securities and
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`Exchange Commission (“SEC”) Rule 14a-9, 17 C.F.R. §240.14a-9 (“Rule 14a-9”), in connection
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`with the Board’s attempt to sell iRobot to Amazon.com, Inc. (“Amazon”) (the “Proposed
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`Transaction”).
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`Case 1:22-cv-08445 Document 1 Filed 10/04/22 Page 2 of 10
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`2.
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`On August 4, 2022, iRobot entered into an Agreement and Plan of Merger with
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`Amazon and Martin Merger Sub, Inc. (“Merger Sub”) (the “Merger Agreement”). Pursuant to
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`the terms of the Merger Agreement, Amazon will acquire iRobot for $61.00 in cash for each
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`iRobot common share.
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`3.
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`On September 7, 2022, the Board authorized the filing of the materially incomplete
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`and misleading Schedule 14A Definitive Proxy Statement (the “Proxy Statement”) with the SEC.
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`Specifically, the Proxy Statement, which recommends that iRobot stockholders vote their shares
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`in favor of the Proposed Transaction, contains materially incomplete and misleading information
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`concerning, among other things: (i) the financial projections for the Company; (ii) the financial
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`analyses that support the fairness opinion provided by the Company’s financial advisor Qatalyst
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`Partners LP (“Qatalyst”); and (iii) potential conflicts of interest faced by Company insiders.
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`4.
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`The failure to adequately disclose such material information constitutes a violation
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`of Sections 14(a) and 20(a) of the Exchange Act as iRobot stockholders need such information in
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`order to make a fully informed decision in connection with the Proposed Transaction.
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`5.
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`The special meeting for iRobot stockholders to vote on the Proposed Transaction
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`is currently scheduled for October 17, 2022. It is imperative that such Exchange Act violations
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`are promptly cured to enable Plaintiff and iRobot’s other shareholders to make an informed
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`decision whether to vote their shares in favor of the Proposed Transaction. Therefore, Plaintiff
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`seeks to enjoin the stockholder vote unless and until such Exchange Act violations are cured.
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`JURISDICTION AND VENUE
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`6.
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`This Court has jurisdiction over the claims asserted herein for violations of Sections
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`14(a) and 20(a) of the Exchange Act and SEC Rule 14a-9 promulgated thereunder pursuant to
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`Case 1:22-cv-08445 Document 1 Filed 10/04/22 Page 3 of 10
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`Section 27 of the Exchange Act, 15 U.S.C. § 78aa, and 28 U.S.C. § 1331 (federal question
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`jurisdiction).
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`7.
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`Personal jurisdiction exists over the defendants because each defendant either
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`conducts business in or maintains operations within this District, or is an individual with sufficient
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`minimum contacts with this District so as to make the exercise of jurisdiction by this Court
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`permissible under traditional notions of fair play and substantial justice.
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`8.
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`Venue is proper in this District pursuant to 28 U.S.C. § 1391 because defendants
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`are found or are inhabitants or transact business in this District. iRobot’s common stock trades on
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`the Nasdaq Global Select Market, which is headquartered in this District, rendering venue in this
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`District appropriate.
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`THE PARTIES
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`9.
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`Plaintiff is, and has been at all relevant times, the owner of shares of iRobot
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`common stock.
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`10.
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`Defendant iRobot is a Delaware corporation, with its principal executive offices
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`located at 8 Crosby Drive, Bedford, Massachusetts 01730. iRobot’s shares trade on the Nasdaq
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`Global Select Market under the ticker symbol “IRBT.”
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`11.
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`Defendant Colin Angle has been Chairman of the Board and Chief Executive
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`Officer and a director of the Company at all relevant times.
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`12.
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`Defendant Mohamad Ali has been Lead Independent Director of the Board and a
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`director of the Company at all relevant times.
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`13.
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`Defendant Deborah G. Ellinger has been a director of the Company at all relevant
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`times.
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`14.
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`Defendant Karen M. Golz has been a director of the Company at all relevant times.
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`Defendant Ruey-Bin Kao has been a director of the Company at all relevant times.
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`Defendant Eva Manolis has been a director of the Company at all relevant times.
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`Defendant Andrew Miller has been a director of the Company at all relevant times.
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`Defendant Michelle V. Stacy has been a director of the Company at all relevant
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`15.
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`16.
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`17.
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`18.
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`times.
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`19.
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`Defendants identified in paragraphs 11-18 are collectively referred to herein as the
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`“Board” or the “Individual Defendants.”
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`SUBSTANTIVE ALLEGATIONS
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`Background of the Company
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`20.
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`Founded in 1990, iRobot designs, builds, and sells robots and home innovation
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`products in the United States, Europe, the Middle East, Africa, Japan, and internationally. The
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`Company’s offerings include floor care products, including the Roomba floor vacuuming robots
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`and Roomba accessories and consumable and the Braava family of automatic floor mopping robots
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`and Braava accessories and consumables. iRobot also provides the portable H1 Handheld Vacuum
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`and accessories and air purifiers under the Aeris brand, among other things.
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`The Proposed Transaction
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`21.
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`On August 5, 2022, iRobot announced that it had entered into the Proposed
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`Transaction, stating, in relevant part:
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`SEATTLE and BEDFORD, Mass., Aug. 5, 2022 /PRNewswire/ -- Today Amazon
`(NASDAQ:AMZN) and iRobot (NASDAQ:IRBT) announced that they have
`entered into a definitive merger agreement under which Amazon will acquire
`iRobot. iRobot has a history of making customers' lives easier with innovative
`cleaning products for the home. iRobot has continued to innovate with every
`product generation, solving hard problems to help give customers valuable time
`back in their day.
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`“We know that saving time matters, and chores take precious time that can be better
`spent doing something that customers love,” said Dave Limp, SVP of Amazon
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`Devices. “Over many years, the iRobot team has proven its ability to reinvent how
`people clean with products that are incredibly practical and inventive—from
`cleaning when and where customers want while avoiding common obstacles in the
`home, to automatically emptying the collection bin. Customers love iRobot
`products—and I'm excited to work with the iRobot team to invent in ways that make
`customers' lives easier and more enjoyable.”
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`“Since we started iRobot, our team has been on a mission to create innovative,
`practical products that make customers' lives easier, leading to inventions like the
`Roomba and iRobot OS,” said Colin Angle, chairman and CEO of iRobot.
`“Amazon shares our passion for building thoughtful innovations that empower
`people to do more at home, and I cannot think of a better place for our team to
`continue our mission. I'm hugely excited to be a part of Amazon and to see what
`we can build together for customers in the years ahead.”
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`Amazon will acquire iRobot for $61 per share in an all-cash transaction valued at
`approximately $1.7 billion, including iRobot's net debt. Completion of the
`transaction is subject to customary closing conditions, including approval by
`iRobot's shareholders and regulatory approvals. On completion, Colin Angle will
`remain as CEO of iRobot.
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`The Materially Incomplete and Misleading Proxy Statement
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`22.
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`On September 7, 2022, the Board caused to be filed a materially incomplete and
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`misleading Proxy Statement with the SEC. The Proxy Statement, which recommends that iRobot
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`stockholders vote their shares in favor of the Proposed Transaction, fails to disclose material
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`information to Company stockholders, or provides them with materially misleading information,
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`concerning: (i) the financial projections for the Company; (ii) the financial analyses that support
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`the fairness opinion provided by the Company’s financial advisor Qatalyst; and (iii) potential
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`conflicts of interest faced by Company insiders.
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`Material Misrepresentations and/or Omissions Concerning Financial Projections for iRobot
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`23.
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`The Proxy Statement fails to disclose material information concerning the financial
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`projections for the Company.
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`24.
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`For example, the Proxy Statement fails to disclose “the consensus of third-party
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`research analysts’ projections of the future financial performance of the Company as of August 3,
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`2022 (the “analyst projections”)” relied upon by Qatalyst in connection with the financial analysis
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`underlying its fairness opinion. Proxy Statement at 55.
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`Material Misrepresentations and/or Omissions Concerning Qatalyst’s Financial Analyses
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`25.
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`The Proxy Statement fails to disclose material information concerning Qatalyst’s
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`financial analyses.
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`26. With respect to Qatalyst’s Illustrative Discounted Cash Flow Analysis, the Proxy
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`Statement fails to disclose a quantification of: (i) the Company’s terminal values; (ii) the inputs
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`and assumptions underlying the discount rates ranging from 11.5% to 15.5%; and (iii) the
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`Company’s fully diluted outstanding shares, as adjusted.
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`27. With respect to Qatalyst’s Selected Companies Analysis, the Proxy Statement fails
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`to disclose: (i) the individual financial metrics for each of the selected companies analyzed by
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`Qatalyst; and (ii) the Company’s fully diluted outstanding shares, as adjusted.
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`Material Misrepresentations and/or Omissions Concerning Company Insiders’ Potential Conflicts
`of Interest
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`28.
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`The Proxy Statement fails to disclose material information concerning potential
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`conflicts of interest faced by Company insiders.
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`29.
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`Specifically, the Proxy Statement fails to disclose whether any of Amazon’s
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`proposals or indications of interest mentioned management retention in the combined company
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`following the Proposed Transaction or the purchase of or participation in the equity of the
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`surviving corporation.
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`30.
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`In sum, the omission of the above-referenced information renders statements in the
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`“Certain iRobot Unaudited Prospective Financial Information,” “Opinion of Qatalyst Partners
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`LP,” “Background of the Merger,” and “Interests of the Company’s Directors and Executive
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`Officers in the Merger” sections of the Proxy Statement materially incomplete and misleading in
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`contravention of the Exchange Act. Absent disclosure of the foregoing material information prior
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`to the stockholder vote, Plaintiff and the other stockholders of iRobot will be unable to make a
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`sufficiently informed decision in connection with the Proposed Transaction and are thus threatened
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`with irreparable harm warranting the injunctive relief sought herein.
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`CLAIMS FOR RELIEF
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`COUNT I
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`Claims for Violation of Section 14(a) of the Exchange Act and Rule 14a-9 Promulgated
`Thereunder Against the Individual Defendants and iRobot
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`31.
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`32.
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`Plaintiff repeats and realleges the preceding allegations as if fully set forth herein.
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`The Individual Defendants disseminated the false and misleading Proxy Statement,
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`which contained statements that, in light of the circumstances under which they were made,
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`omitted to state material facts necessary to make the statements therein not materially misleading,
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`in violation of Section 14(a) of the Exchange Act and Rule 14a-9. iRobot is liable as the issuer of
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`these statements.
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`33.
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`The Proxy Statement was prepared, reviewed, and/or disseminated by the
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`Individual Defendants. By virtue of their positions within the Company, the Individual Defendants
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`were aware of this information and their duty to disclose this information in the Proxy Statement.
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`34.
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`The Individual Defendants were at least negligent in filing the Proxy Statement
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`with these materially false and misleading statements.
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`35.
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`The omissions and false and misleading statements in the Proxy Statement are
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`material in that a reasonable stockholder will consider them important in deciding how to vote on
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`the Proposed Transaction. In addition, a reasonable investor will view a full and accurate
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`disclosure as significantly altering the total mix of information made available in the Proxy
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`Statement and in other information reasonably available to stockholders.
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`36.
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`The Proxy Statement is an essential link in causing Plaintiff and the Company’s
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`stockholders to approve the Proposed Transaction.
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`37.
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`By reason of the foregoing, defendants violated Section 14(a) of the Exchange Act
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`and Rule 14a-9 promulgated thereunder.
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`38.
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`Because of the false and misleading statements in the Proxy Statement, Plaintiff is
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`threatened with irreparable harm.
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`COUNT II
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`Claims for Violation of Section 20(a) of the Exchange Act
`Against the Individual Defendants
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`Plaintiff repeats and realleges the preceding allegations as if fully set forth herein.
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`The Individual Defendants acted as controlling persons of iRobot within the
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`39.
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`40.
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`meaning of Section 20(a) of the Exchange Act as alleged herein. By virtue of their positions as
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`officers and/or directors of iRobot and participation in and/or awareness of the Company’s
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`operations and/or intimate knowledge of the false statements contained in the Proxy Statement,
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`they had the power to influence and control and did influence and control, directly or indirectly,
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`the decision making of the Company, including the content and dissemination of the various
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`statements that Plaintiff contends are false and misleading.
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`41.
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`Each of the Individual Defendants was provided with or had unlimited access to
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`copies of the Proxy Statement alleged by Plaintiff to be misleading prior to and/or shortly after
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`these statements were issued and had the ability to prevent the issuance of the statements or cause
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`them to be corrected.
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`42.
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`In particular, each of the Individual Defendants had direct and supervisory
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`involvement in the day-to-day operations of the Company, and, therefore, is presumed to have had
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`the power to control and influence the particular transactions giving rise to the violations as alleged
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`herein, and exercised the same. The Proxy Statement contains the unanimous recommendation of
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`the Individual Defendants to approve the Proposed Transaction. They were thus directly involved
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`in the making of the Proxy Statement.
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`43.
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`By virtue of the foregoing, the Individual Defendants violated Section 20(a) of the
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`Exchange Act.
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`44.
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`As set forth above, the Individual Defendants had the ability to exercise control
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`over and did control a person or persons who have each violated Section 14(a) of the Exchange
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`Act and Rule 14a-9, by their acts and omissions as alleged herein. By virtue of their positions as
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`controlling persons, these defendants are liable pursuant to Section 20(a) of the Exchange Act. As
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`a direct and proximate result of defendants’ conduct, Plaintiff is threatened with irreparable harm.
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`PRAYER FOR RELIEF
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`WHEREFORE, Plaintiff demands judgment and preliminary and permanent relief,
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`including injunctive relief, in his favor on behalf of iRobot, and against defendants, as follows:
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`A.
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`Preliminarily and permanently enjoining defendants and all persons acting in
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`concert with them from proceeding with, consummating, or closing the Proposed Transaction,
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`including the stockholder vote on the Proposed Transaction, unless and until defendants disclose
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`the material information identified above which has been omitted from the Proxy Statement;
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`B.
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`In the event defendants consummate the Proposed Transaction, rescinding it and
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`setting it aside or awarding rescissory damages to Plaintiff;
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`C.
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`Directing the Individual Defendants to file a Proxy Statement that does not contain
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`any untrue statements of material fact;
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`D.
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`Awarding Plaintiff the costs of this action, including reasonable allowance for
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`Plaintiff’s attorneys’ and experts’ fees; and
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`E.
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`Granting such other and further relief as this Court may deem just and proper.
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`JURY DEMAND
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`Plaintiff demands a trial by jury.
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`Dated: October 4, 2022
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`By
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`ACOCELLI LAW, PLLC
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`/s/ Richard A. Acocelli
`Richard A. Acocelli
`33 Flying Point Road, Suite 131
`Southampton, NY 11968
`Tel: (631) 204-6187
`Email: racocelli@acocellilaw.com
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`Attorneys for Plaintiff
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