By Robb M. Stewart


Technology company Symbotic has struck a deal to expand its partnership with Walmart, taking on a $520 million program to develop an automated delivery platform for Walmart stores while also agreeing to buy the retail giant's advanced systems and robotics business.

Walmart selected Symbotic to develop, build and deploy a system that will automate and speed up online pickup and delivery options at stores.

The retailer will fund a development program that aims to leverage Symbotic's artificial intelligence-enabled robotics platform and will seek to enhance Walmart's current online pickup and delivery fulfillment systems and design new systems. Symbotic said that if performance criteria are met, Walmart is committed to buying and deploying systems for 400 accelerated pickup and delivery centers at stores over a multi-year period.

Symbotic has agreed buy Walmart's advanced systems and robotics business for $200 million in cash and up to $350 million in future additional payments that will be dependent on the number of accelerated pickup and delivery systems ordered.

The technology company said the transaction and new agreements could increase its future backlog of work by more than $5 billion.

Symbotic's shares rallied roughly 17% in premarket trading Thursday after news of the agreement with Walmart. The stock before this was trading down about 35% over the last 12 months, though it has risen in the new year.

"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," Symbotic Chairman and Chief Executive Rick Cohen said.

Symbotic has been working with Walmart since 2017 to automate its vast supply chain. The technology company currently is deploying its software and robotics platform across all 42 of Walmart's regional distribution centers in the U.S.

The purchase of Walmart's business will add new product categories for Symbotic as it looks at opportunities in automated fulfillment of customer orders at the local and store level. The company said adding a micro-fulfillment solution expands its addressable market by more than $300 billion in the U.S. alone.

Walmart's advanced systems and robotics business traces its roots to Alert Innovation, a company founded in 2013 focused on automation and robotic technologies for the retail industry. Walmart began collaborating with Alert Innovation in 2016 on technology for its market fulfillment centers, and bought the company in late 2022.


Write to Robb M. Stewart at robb.stewart@wsj.com


(END) Dow Jones Newswires

01-16-25 0756ET