Shares of Symbotic Inc. (SYM) surged approximately 16% in pre-market trading on the Nasdaq following the company's announcement. On Thursday, the AI-powered robotics technology firm, specializing in supply chain solutions, revealed its agreement to acquire the Advanced Systems and Robotics division from industry giant Walmart Inc. (WMT). The acquisition cost is set at $200 million payable in cash upon closing, subject to standard adjustments.
The transaction is expected to be finalized in Symbotic's fiscal second quarter of 2025.
In addition, Walmart has commissioned Symbotic to design, construct, and implement a sophisticated solution that automates its Accelerated Pickup and Delivery centers (APDs). This involves purchasing and deploying systems for 400 APDs at various store locations over several years. Moreover, Walmart retains the option to incorporate additional APDs in the forthcoming years.
The agreement also includes a potential additional payout of up to $350 million in future periods, contingent on the number of APD systems ordered.
Under the terms of the agreement, Symbotic will embark on a development initiative funded by Walmart. The goal is to enhance existing online pickup and delivery fulfillment systems while also designing new systems tailored to meet the demands of current and future clientele.
As part of this initiative, Walmart will compensate Symbotic a total of $520 million, including an upfront payment of $230 million at the time of closing.
Symbotic highlighted that the acquisition and the new agreements could potentially increase its future backlog by over $5 billion and introduce a micro-fulfillment solution that expands its addressable market in the United States by more than $300 billion.
Rick Cohen, Symbotic's Chairman and CEO, stated, "This represents a highly strategic transaction for Symbotic. It extends our long-standing relationship with Walmart and broadens our product portfolio beyond conventional warehouse offerings to include eCommerce environments for the crucial last-mile delivery."
In pre-market trading on the Nasdaq, Symbotic shares were priced at $30.99, reflecting a 15.76% increase.
