Corona is a nightmare, but drives forward new technologies

Ocado truck. Photo: Mikecphoto/Dreamstime
British Ocado is working on acquisitions of companies with new technological solutions. Photo: Mikecphoto/Dreamstime
By Reidar Molthe

3 November 2020 11:28

Corona is a nightmare, but drives forward new technologies

Covid19 is a plague and a nuisance for everyone. However, for the grocery retail business it has led to strong growth and increased profitability because people do not eat out anymore. It is more important to note that the Corona is also pushing forward new technological solutions in the value chain.

One of the leading companies in the world in online logistics is British Ocado, which is working on new acquisitions of companies with new technological solutions.

In the United States, Walmart is conducting a series of experiments to develop the value chain. We will come back to that shortly.

Today we limit ourselves to discussing what Ocado does to develop the company as an innovator in online logistics.

As many are familiar with, Ocado collaborates with ICA, Sweden's largest and most powerful grocery retailer.

Kindred Systems and Haddington Dynamics

Ocado has announced the proposed acquisitions of Kindred Systems and Haddington Dynamics in two deals worth $287 million.

Kindred Systems was described by Ocado as an advanced piece-picking robotics company and set to be acquired by the online grocery platform for $262 million, subject to closing adjustments, writes Charged, a business news site.

Founded in 2014 and based in Toronto and San Francisco, Kindred Systems designs, supplies and services piece-picking robots for ecommerce and order fulfilment. Kindred Systems has around 90 employees, with approximately half set to join Ocado’s existing technology team.

The other company in pipeline is Haddington Dynamics is a robotic-arm designer and manufacturer set to be acquired by Ocado for $25 million, subject to closing adjustments.

Based in Las Vegas, Haddington Dynamics specializes in the design and manufacturer of low-cost, lightweight robotic arms, and counts NASA as a current client.

Expects accelerated automation

The online retail platform says it expects Kindred Systems and Haddington Dynamics to accelerate the commercialization of robotic picking and other automation tasks.

“We consider the opportunities for robotic manipulation solutions to be significant, both for Ocado Smart Platform clients and across the fast-growing online retail and logistics sectors,” says Tim Steiner, CEO in Ocado.

“Ocado has made meaningful progress in developing the machine learning, computer vision and engineering systems required for the robotic picking solutions. Given the market opportunity we want to accelerate the development of our systems, including improving their speed, accuracy, product range and economics. I am also excited by the opportunity to enter new markets for robotic solutions outside of grocery sector, as demonstrated by Kindred Systems’ robust growth, with existing customers such as Gap and American Eagle.”

Financed by reserves and shares

Ocado noted that the transaction will have no financial impact on the current financial year.

The Kindred Systems acquisition is set to be financed by Ocado’s cash reserves and Haddington Dynamics with a mix of $7 million in cash and 0.6 million new Ocado ordinary shares.

Ocado shares have gained about 78% this year!

“We continue experiencing high demand for consumers migrating to online grocery,” concludes Tim Steiner, CEO of a company that still does not make money.

Sources: Reuters, Bloomberg, Charged, Ocado, ICA, M&S, Walmart.

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