Amazon.com Buys Kiva Systems for $775 Million

Remember the post [December 24, 2012 Robot Workers Take Over Warehouses], well it seems as though Amazon is now taking over the robots themselves.  Amazon announced today that it is acquiring Kiva Systems a custom maker of robots for $775 million.


As noted below it seems like Amazon decided why not own the entire company and try to ring out even more cost savings?  As noted in my earlier post back in December companies are trying anything and everything to bring costs down.  Especially companies with low margins who can't always make it up in volume.  Any downturn in revenue can simply crush a high flying stock such as Amazon which already boats a current P/E of 140.8.


Via DealB%K

• “Amazon has long used automation in its fulfillment centers, and Kiva’s technology is another way to improve productivity by bringing the products directly to employees to pick, pack and stow,” Dave Clark, Amazon.com’s vice president of global customer fulfillment said in a statement. “Kiva shares our passion for invention.” 



Beth Hall/Bloomberg News 

• Kiva, based in North Reading, Mass., builds robots to help retailers manage their inventory and fulfill orders. Founded in 2003 by its chief executive, Mick Mountz — a former employee of Webvan, the once high-flying delivery service that folded after the dot-com bust — Kiva services many large retailers, like Gap, Staples and Saks. Its investors include Bain Capital Ventures, the venture capital arm of Bain Capital, and Meakem BeckerVenture Capital.

 

• “Amazon has not had great margins,” Jason Helfstein, an analyst at Oppenheimer & Company. “One has to believe they looked at this and thought, ‘Why not just own it and take all the technology in house?’” 
• Folding Kiva into its system may also help Amazon trim costs. In filings, the retailer has discussed the difficulty of filling and tracking orders as it grows. “As we continue to add fulfillment and warehouse capability or add new businesses with different fulfillment requirements, our fulfillment network becomes increasingly complex and operating it becomes more challenging,” Amazon noted in a recent filing. 
• Kiva ranks as Amazon’s second-largest acquisition, behind its $847 million takeover of the shoe and accessories retailer Zappos.com in 2009.