Symbotic to provide integrated supply chain robots for Walmart

Automated storage and retrieval system (AS/RS) provider Symbotic Inc. recently announced it has agreed to acquire the Advanced Systems and Robotics business from Walmart.

This transaction expands the long-standing relationship between Walmart and Symbotic with the aim of developing an integrated automated supply chain.

The acquisition is anticipated to close in Symbotic’s fiscal second quarter of 2025. Citi served as financial advisor to Symbotic.

Walmart to fund accelerated pickup and delivery systems

Walmart has chosen Symbotic to develop, build, and deploy an advanced system leveraging Symbotic’s AI-enabled robotics platform for supply chain applications to offer Walmart customers greater shopping convenience through accelerated online pickup and delivery options at stores.

Symbotic will engage in a development program funded by Walmart to enhance current online pickup and delivery fulfillment systems as well as to design new systems to meet the needs of current and future customers.

If performance criteria are achieved, Walmart has committed to purchasing and deploying systems for 400 Accelerated Pickup and Delivery centers (APDs) at stores over a multi-year period, with Walmart’s option to add additional APDs in the coming years.

Associated with the development program, Walmart will pay Symbotic a total of $520 million, including $230 million at closing.

Microfulfillment, APD to support e-commerce growth

The transaction and new agreements could increase Symbotic’s future backlog by more than $5 billion.

The acquisition adds a new product category for Symbotic, microfulfillment, to address opportunities for automated fulfillment of customer orders at the local and store level, supporting the growth of e-commerce. Adding microfulfillment expands its addressable market by more than $300 billion in the U.S. alone.

Total consideration for the acquisition is $200 million in cash at close, subject to customary adjustments, and up to $350 million in additional contingent consideration in future periods dependent upon the quantity of APD systems ordered.

“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 e-commerce settings for last mile delivery,” said Rick Cohen, Symbotic chairman and CEO.

Companies expand upon decade of collaboration

Symbotic said it has played a critical role in enabling Walmart to automate its supply chain since 2017 and is currently deploying its software and robotics platform across all 42 of Walmart’s regional distribution centers in the U.S.

“We’re excited about what this means for our customers,” said Greg Cathey, Walmart SVP of transformation and innovation. “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.”

Symbotic said bringing its knowledge and technology platform to the APD is a natural extension of the companies’ current relationship and will allow Walmart to utilize its stores to fulfill e-commerce orders through pickup and delivery more efficiently, economically, and accurately.

Approximately 90% of the U.S. population lives within 10 miles of Walmart’s more than 4,600 stores. Walmart’s store-fulfilled deliveries grew nearly 50% year-over-year, surpassing a $2.5 billion monthly run rate, during its quarter ending Oct. 31, 2024.