Amazon.com will spend $775 million in cash for Kiva Systems, a material handling technology company that’s known for its automated warehouse fulfillment systems.
The acquisition is part of Amazon’s continued spending on facilities and operations to enhance its growing business. This is Amazon’s second largest acquisition behind its $896.4 million purchase of Zappos.com in 2009.
Kiva’s stockholders have already approved the deal and the companies expect to close in the second quarter. Kiva's headquarters will remain in North Reading, Mass.
“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,” said Dave Clark, vice president, global customer fulfillment at Amazon.
Amazon said its warehouses have traditionally had a large labor pool.
According to Kiva, its technology is used by major retailers such as Gap, Crate & Barrel, Staples, Office Depot, and Diapers.com.
During Amazon’s fourth quarter earning calls, it noted a 57 percent decline in fourth-quarter profit and said this was mainly due to investment in new facilities including distribution and fulfillment centers. The company said on the call that it built 17 new fulfillment centers in 2011, bringing its total up to 69. It also plans further construction this year. — Geoff Whiting