Amazon Gets Robotic With a $775 Million Deal

Buying Kiva could help improve Amazon's margins

   
Amazon Gets Robotic With a $775 Million Deal

Yesterday Amazon.com (NASDAQ:AMZN) announced a $775 million acquisition of Kiva Systems, which is a privately held developer of robot technology. The deal should close in the second quarter.

Kiva is likely to be a big help with Amazon’s warehouses, which tend to be labor-intensive. That’s because Kiva’s  robots can pick up products off the shelves and quickly move them.

Kiva has customers like Gap (NYSE:GPS) and Crate & Barrel. Even some of Amazon’s subsidiaries use the robots, like Zappos.

In the last earnings report, Amazon showed continued weakness in its margins. Consider that over the past year, the fulfillment expense as a percentage of revenue went from 8.2% to 8.2%. So, using robots could be a smart way to help get more efficient.

 


Article printed from InvestorPlace Media, http://investorplace.com/2012/03/amazon-gets-robotic-with-a-775-million-deal/.

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