Symbotic Inc. (NASDAQ:SYM) shares traded higher premarkets on Thursday after the company disclosed a deal to acquire Walmart Inc.‘s (NYSE:WMT) Advanced Systems and Robotics business.

The acquisition’s total consideration is $200 million in cash and Symbotic will pay Walmart up to $350 million in additional contingent consideration in future periods dependent upon the quantity of APD systems ordered.

Notably, Walmart has chosen Symbotic to develop and deploy an advanced solution to automate its Accelerated Pickup and Delivery centers (APDs), with an initial order for hundreds of 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 plans to purchase and deploy systems for 400 APDs over several years, with the option to add more. Walmart will pay Symbotic $520 million for the development program, including $230 million at closing.

The transaction and new agreements could boost Symbotic’s future backlog by over $5 billion and expand its addressable market by more than $300 billion in the U.S. through a new micro-fulfillment solution.

The acquisition is expected to close in Symbotic’s fiscal second quarter of 2025.

Rick Cohen, Chairman and Chief Executive Officer of Symbotic, stated “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.” 

Greg Cathey, Senior Vice President of Transformation and Innovation at Walmart, said, ”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’s cash and equivalents stood at $730 million at the end of the fourth quarter.

Investors can gain exposure to the stock via First Trust Nasdaq Artificial Intelligence and Robotics ETF (NASDAQ:ROBT).

Price Action: SYM shares are up 23.8% at $33.15 premarket at the last check Thursday.

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This article Symbotic Soars After Robotics Deal With Walmart - What's Going On? originally appeared on Benzinga.com

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