Amazon.com agrees to acquire Kiva Systems

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Amazon.com has agreed to acquire Kiva Systems for $775 million in cash, the company said in a statement. Kiva Systems, which will retain its brand, provides end-to-end material handling solutions for distribution centers, which include automated robots for moving inventory and software for tracking products throughout the picking and sorting process.

Kiva Systems, whose clients include Amazon companies Soap.com and Diapers.com, will improve productivity in Amazon's distribution centers “by bringing the products directly to employees to pick, pack and stow,” said Dave Clark, Amazon's VP of global customer fulfillment, in a statement.

Over the past year, Amazon had worked to optimize its back-end operations by increased staffing. The company's year-end employee headcount saw 67% growth, dwarfing the company's 41% sales growth, which Amazon CFO Thomas Szkutat attributed toward hiring within customer service and operations.

"We are still evaluating how and where we will use Kiva technology at Amazon," said Mary Osako, a member of Amazon's corporate communications team. "Our customers will continue to enjoy fast delivery when ordering from Amazon."

Kiva's current enterprise customers, which include Crate & Barrel, The Gap and Office Depot, "will continue to receive service and support after the transaction," Osako said. Additionally Kiva founder and CEO Mick Mountz will continue to manage the business with his current team.

The Kiva acquisition is the most Amazon has paid for a company since its 2009 purchase of online shoe and clothing retailer Zappos.com for 10 million Amazon shares which, at the time of the acquisition, was valued at slightly less than $900 million.

The deal is expected to close during the second quarter.

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