Amazon acquiring Kiva Systems for $775 million

Amazon acquiring Kiva Systems for $775 million

Summary: Amazon acquires Kiva Systems, which boasts scalable and automated material handling systems that will likely be put to work in Amazon warehouses soon.

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Amazon has announced that it is planning to acquire Kiva Systems, Inc., which is known for its automated material handling order fulfillment system.

Given Kiva's scalable e-commerce and warehouse automation solutions, it seems that Amazon will be putting Kiva's resources to use for internal management related to its online retail business and warehouses worldwide.

Dave Clark, vice president of global customer fulfillment at Amazon.com, commented in a release, "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."

Kiva's robotic helpers have already garnered quite a bit of attention. For example, Fast Company recently named Kiva Systems as one of the 50 most innovative companies in the world.

Under the terms of the agreement, Amazon is paying $775 million in cash for all of Kiva's outstanding shares, which has been adjusted for the assumption of options and other items.

Although Kiva’s stockholders have already approved the merger, the acquisition is expected to close during the second quarter of 2012.

Once the deal has closed, Kiva Systems’ offices and employees will remain in North Reading, Massachusetts rather than heading west to Amazon's Seattle headquarters.

For more details about Amazon and Kiva's past and future relationship, check out more coverage on CNET.

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3 comments
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  • amazon acquire Kiva

    Surely it would be cheaper to just buy their systems to put in their warehouses rather than buy the whole company?
    PeteStan1
    • Sure, but there's more than just shipping robots in play here...

      It could likely be cheaper, but then they wouldn't have the power. If Amazon doesn't want anyone to emulate their great success, controlling a powerhouse like Kiva Systems is a good chess move. Doesn't hurt that Kiva has experienced monstrous growth paired with a strong revenue stream.

      Great move by Amazon.
      liam_
  • Kiva Systems' patents?

    If ???proprietary??? expectations in the form of patents were part of the premium paid by Amazon.com for Kiva, Amazon's investors may be interested in the accounting for this acquisition, because 75% of Kiva???s US patents appear to be commercially impaired. Perhaps the $775M acquisition price should have been right-sized to reflect not just Kiva???s robots, but the quality of the intellectual properties that may not adequately protect Amazon???s soon-to-be business.

    A full report on this can be found here: http://www.m-cam.com/patently-obvious/domo-arigato-amazon-roboto-intellectual-property-analysis-kiva-systems-inc
    PatentlyObvious