Symbotic Inc. has announced a significant acquisition of Walmart Inc.’s Advanced Systems and Robotics business for a total consideration of $200 million in cash, alongside contingent considerations that could rise to $350 million based on the volume of purchased Accelerated Pickup and Delivery (APD) systems. This development was disclosed in a statement, leading to a marked increase in Symbotic’s share price ahead of the stock market opening, reflecting a 23.8% ascent to $33.15.
The agreement positions Symbotic to advance automation within Walmart’s APD centres, with an initial commitment to enhance online pickup and delivery processes across hundreds of Walmart stores. In conjunction with the acquisition, Walmart has agreed to fund a development programme aimed at improving existing systems and creating new ones to accommodate evolving customer needs. This programme has a total value of approximately $520 million, with $230 million payable upon closing of the agreement.
Walmart’s long-term vision includes the rollout of automation systems to 400 APDs over several years, contingent upon meeting specific performance metrics. The potential expansion options available could further extend Symbotic’s growth opportunities, significantly increasing their future backlog by over $5 billion and vastly expanding their addressable market by more than $300 billion in the US through innovative micro-fulfillment solutions.
Rick Cohen, the Chairman and CEO of Symbotic, commented on the deal, emphasising its strategic importance: “This is a highly strategic transaction for Symbotic as we expand upon our long-term relationship with Walmart and broaden our product offering beyond the traditional warehouse to eCommerce settings for last mile delivery.”
Greg Cathey, Senior Vice President of Transformation and Innovation at Walmart, also highlighted the advantages of the collaboration, stating, “We anticipate the synergy between Symbotic’s expertise and our nearly decade-long relationship in innovating the supply chain technologies to elevate customer service and rapidly advance our in-store Accelerated Pickup and Delivery capabilities.”
As of the close of the fourth quarter, Symbotic reported cash and equivalents amounting to $730 million, which may be strategically leveraged to support this acquisition and further investments in technology developments. The transaction is projected to be finalised in Symbotic's fiscal second quarter of 2025, marking a key milestone in the ongoing integration of advanced automation technologies within major retail operations.
Investors are now presented with options to gain exposure to Symbotic through the First Trust Nasdaq Artificial Intelligence and Robotics ETF (ROBT), reflecting a growing interest in the intersection of robotics and retail automation.
Source: Noah Wire Services