Symbotique Inc. (NASDAQ:SYM) shares traded higher in premarket Thursday after the company disclosed an acquisition agreement Walmart Inc.(NYSE: WMT) Advanced systems and robotics business.
Total consideration for the acquisition is $200 million in cash and Symbotic will pay Walmart up to $350 million in additional contingent consideration in future periods, depending on the quantity of APD systems ordered.
Notably, Walmart selected Symbotic to develop and deploy an advanced solution to automate its Expedited Pickup and Delivery (APD) centers, with an initial order for hundreds of stores.
Symbotic will engage in a Walmart-funded development program to improve current online pickup and delivery systems as well as design new systems to meet the needs of current and future customers.
If performance benchmarks are met, Walmart plans to purchase and deploy systems for 400 APD over several years, with the option to add more. Walmart will pay Symbotic $520 million for the development program, including $230 million at closing.
The transaction and new agreements could increase Symbotic’s future order book by more than $5 billion and expand its addressable market by more than $300 billion in the United States through a new micro-fulfillment solution.
The acquisition is expected to be completed during Symbotic’s second fiscal quarter 2025.
Rick CohenChairman and CEO of Symbotic, said: “This is a highly strategic transaction for Symbotic as we grow our long-term relationship with Walmart and expand our product offerings beyond the traditional warehouse to to e-commerce settings for last mile delivery.
Greg CatheySenior Vice President of Transformation and Innovation at Walmart, said: “We anticipate the synergy between Symbotic’s expertise and our nearly decade-long relationship in supply chain technology innovation to improve customer service and rapidly advance our expedited store pickup and delivery capabilities. .”
Symbotic’s cash and equivalents were $730 million at the end of the fourth quarter.
Investors can gain exposure to the stock via First Trust Nasdaq Artificial Intelligence & Robotics ETF (NASDAQ:ROBT).
Price action: SYM shares are up 23.8% at $33.15 premarket at last check Thursday.
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