Ocado paid $262M for Kindred and $25M for Haddington to automate picking and decanting

Ocado is a UK online grocer that sells its e-commerce and automated warehouse technology to supermarkets worldwide.

Owning robot-picking and robot-arm companies lets Ocado automate the last human warehouse tasks and sell fulfilment technology beyond grocery.

$262 million in cash for Kindred Systems; $25 million in cash and stock for Haddington Dynamics

Ocado runs highly automated fulfilment centers in which thousands of robots pull crates from a grid called the hive. People still decant deliveries into crates and pack customer orders at pick stations. Ocado said these two jobs cost about $9 million per warehouse per year. CTO Paul Clarke has described a fully dark, near-peopleless fulfilment center as a goal.

Ocado's technology division had invested in autonomous robots and picking for a decade. Matthews said it ran a year-long search, scrutinizing about 15 businesses before choosing Kindred, a San Francisco robotics firm whose warehouse robots serve Gap and American Eagle Outfitters, and Haddington, a small Las Vegas maker of a robotic arm used by customers such as DuPont and NASA.

Ocado said the two deals would add about $38 million to annual revenue and slightly dent profit, and raised its full-year profit forecast to $77.8 million from $52 million. It planned to use Kindred's robots almost immediately and roll them out to customers in two to three years. Matthews said Kindred's clients also signal a move into serving retailers other than grocers.

Decanting and picking are the two human-driven processes in Ocado's warehouses, costing about $9 million per warehouse annually.

Ocado's CTO envisions fully dark fulfilment centers that employ virtually no people.

Kindred's existing clients, Gap and American Eagle, give Ocado a path to retailers beyond grocers.

Ocado wanted general merchandise online as well; Matthews said Kindred would help clients add more of it.

A platform seller can buy components when automation is the bottleneck, after a long screen of candidates, and use the purchases to widen its customer base.

As of 2020-11-02 Ocado planned to start using Kindred's robots almost immediately and to roll them out to its other customers within two to three years. Fortune reported shares up 7% and a raised forecast; later results of the robots were not reported.