Shopify Slides Even as Analysts Back $450 Million 6 River Deal
Shopify to Buy Robot Fulfillment Company for $450 Million
(Bloomberg) -- 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 fulfillment centers in the U.S.
The Ottawa-based company disclosed the purchase of 6 River on Monday for $450 million, with 60% of that in cash and the rest in voting shares, according to a statement from both companies. Shopify fell as much as 4.9% in New York to the lowest in a month, extending the stock’s slump for a third day.
Waltham, Massachusetts-based 6 River uses robots and software to help fill retailers’ orders in warehouses. In June, Shopify laid out a plan to expand its fulfillment business to help merchants using its e-commerce platform deliver products, similar to Amazon.com Inc.
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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 fulfills 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 C$25 million ($19 million) 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% since it went public in 2015. It’s among the nation’s best performing stocks this year with a 150% surge.
--With assistance from Kristine Owram.
To contact the reporters on this story: Natalie Wong in Toronto at nwong133@bloomberg.net;Divya Balji in Toronto at dbalji1@bloomberg.net;Ryan Vlastelica in New York at rvlastelica1@bloomberg.net
To contact the editors responsible for this story: Jacqueline Thorpe at jthorpe23@bloomberg.net, David Scanlan
©2019 Bloomberg L.P.
