Deal for warehouse robotics firm can’t stop slide in Shopify shares
Analysts laud acquisition of 6 River Systems
Shopify Inc. slid after announcing the purchase of 6 River Systems Inc. even after analysts said the deal would help ramp up its $1-billion plan to set up a network of fulfilment centres in the U.S.
The Ottawa-based company disclosed the purchase of 6 River on Monday for $450 million (U.S.), with 60 per cent of that in cash and the rest in voting shares, according to a statement from both companies. Shopify fell as much as 4.9 per cent in New York to the lowest in a month, extending the stock’s slump for a third day.
Waltham, Mass.-based 6 River uses robots and software to help fill retailers’ orders in warehouses. In June, Shopify laid out a plan to expand its fulfilment business to help merchants using its e-commerce platform deliver products, similar to Amazon.com Inc.
6 River was founded by executives who came from Kiva Systems — now Amazon Robotics — and it operates in more than 20 facilities across the U.S., Canada and Europe. It fulfils orders for companies including Lockheed Martin Corp. and Office Depot Inc.
The deal, poised to close in the fourth quarter, is expected to increase Shopify’s expenses by about $25 million (Canadian) in 2019, with no material impact on its revenue for the year.
An investor darling in Canada’s ever-growing tech space, Shopify has climbed more than 1,400 per cent since it went public in 2015. It’s among the nation’s best performing stocks this year with a 150 per cent surge.