Amazon.com Buys a Robotics Company

Amazon.com (AMZN) issued the Amazon.com to Acquire Kiva Systems, Inc. press release on 02012.03.19. Kiva Systems makes industrial robots and Amazon.com is paying $775 million to acquire the Boston-based robotics company. Amazon.com was a Kiva Systems customer (along with Staples, The Gap, CrateAndBarrel.com).

"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," said Amazon.com.

AMZN, which is a small part of the GDT::Portfolio, closed yesterday (02012.03.20) at $192.33. 52-week range: $160.82 - $246.71.

Kiva Systems approximate revenues are $133 million and the company is profitable. Boston-based iRobot, for comparison purposes, has revenues of approximately $465 million and its current market value is about $740 million. In addition, iRobot has about $184 million in cash and $0 debt. IRBT closed yesterday (02012.03.20) at $27.09.

Comparing Kiva Systems with iRobot might be like comparing Jack with Jill; nonetheless, based upon what Amazon.com is paying for Kiva Systems it appears as though IRBT might be undervalued. Although I know nothing, I can't help but ponder if companies like GE and Boeing have an interest in acquiring a company like iRobot.