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March 19, 2012

Amazon.com to snap up Kiva Systems for $775m

The online retailer will use Kiva’s technology to improve productivity by bringing the products directly to employees to pick, pack and stow, according to the company

By CBR Staff Writer

Online retailer Amazon said it has reached an agreement to buy warehouse-robotics company Kiva Systems for $775m in cash.

Following the acquisition, which is expected to close in the second quarter of 2012, Kiva Systems will continue to operate from its headquarters in North Reading, Massachusetts.

Amazon.com global customer fulfillment vice president Dave Clark said 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.

"Kiva shares our passion for invention, and we look forward to supporting their continued growth," added Clark.

Amazon, which has traditionally used more employees in its warehouses, or fulfillment centers, will now make use of Kiva-developed robots that move around briskly in warehouses and move shelves and crates containing products, according to Reuters.

Online retailers Quidsi and Zappos, which have been acquired by Amazon, are said to be using robots developed by Kiva.

Though fulfillment centers are crucial to Amazon’s main online retail business, the company has reportedly been spending more on fulfillment costs of late, which has made this acquisition crucial to reduce its operatonal costs.

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