Ocado buys two US robotics companies as pandemic fuels online shopping
The British online supermarket upgrades its full year earnings outlook
London — British online supermarket and technology group Ocado said on Monday it would buy two robotics companies for $287m and upgraded its full year earnings outlook on the back of strong trading at its retail joint venture with Marks & Spencer.
Ocado said it was buying Kindred Systems, an advanced piece-picking robotics company, for about $262m and Haddington Dynamics, a robotic-arm designer and manufacturer, for about $25m.
Though Ocado has only a 1.8% share of Britain's grocery market, its state-of-the-art technology for robotically operated warehouses has spawned partnerships with supermarket chains about the world, underpinning a stock market valuation of more than £17bn.
Ocado, whose shares rose 9.3% in London, said the purchases would enhance its robotic capabilities and accelerate the commercial delivery of robotic picking for its clients.
They also provide an opportunity for Ocado to enter new markets for robotic solutions outside grocery
“That is demonstrated by Kindred Systems's robust growth, with existing customers such as Gap and American Eagle across the general merchandise and logistics sectors,” said Ocado CEO Tim Steiner.
Steiner said the acquisitions will allow the company to “accelerate delivery, innovate more and grow faster”.
The transactions will have no financial affect in the current year, Ocado said. It forecast they would increase 2021 revenue by about £30m with a small hit on ebitda (earnings before interest, tax, depreciation and amortisation).
Ocado also upgraded its full-year 2020 core earnings outlook due to strong fourth quarter trading so far at Ocado Retail, its joint venture with Marks & Spencer.
It expects full year ebitda to be more than £60m, vs previous guidance of more than £40m.
“Ocado continues to see high demand as consumers migrate to online grocery in record numbers,” it said.
Would you like to comment on this article or view other readers' comments?
Register (it’s quick and free) or sign in now.
Please read our Comment Policy before commenting.