Walmart has agreed to sell its robotics business to Massachusetts-based Symbotic for $200 million at closing with additional future contingency payments. Walmart is also paying Symbotic $520 million for automated technology installation in some stores.
The $520 million deal will add accelerated pickup and delivery centers to aid in fulfillment at hundreds of Walmart stores in the next few years. Symbotic will develop, build and deploy an advanced technology solution that automates its accelerated pickup and delivery centers (APD), with an initial order covering 400 stores. Walmart needs the technology to enhance its online pickup and delivery fulfillment systems as customer needs change.
"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," said Rick Cohen, Symbotic chairman and CEO.
Symbotic has helped Walmart automate its vast supply chain since 2017 and is already deploying its software and robotics platform in all 42 of Walmart's U.S. regional distribution centers. Walmart's store-fulfilled deliveries grew nearly 50% year-over-year, and surpassing a $2.5 billion monthly run rate during its quarter ended Oct. 31, 2024, the release states.
Walmart is to receive $200 million in cash from Symbotic for its robotics operation and up to $350 million in future contingent consideration dependent upon the quality of APD systems ordered, according to the two companies.
"We're excited about what this means for our customers. 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," said Greg Cathey, senior vice president of transformation and innovation at Walmart.
The move for Walmart to sell its robotics business follows the closure of Store No. 8 last year, which was the retailer's internal technology innovation incubator that was launched in 2017 after the acquisition of Jet.com. Much of the work done inside Store No. 8 involved facilitating online sales, customer loyalty, order delivery, automation and robotics. Walmart said the nearly 300 employees at Store No. 8 incubation hub moved to other internal jobs.
Analyst/broker Pete Najarian of MarketRebels said Walmart gets state-of-the-art technology it needs to drive a more efficient fulfillment business and Symbiotic gets steady business with the growing retailer. The acquisition is anticipated to close in Symbotic's fiscal second quarter of 2025. Citi served as a financial advisor to Symbotic.