(Corrects to make clear earnings upgrade is for Ocado group)
* Ocado to buy Kindred Systems for about $262 million
* Ocado to buy Haddington Dynamics for about $25 million
* Upgrades core earnings outlook
* Shares in Ocado rise by 6.7%
By James Davey
LONDON, Nov 2 (Reuters) - British online supermarket and
technology group Ocado said it would buy two robotics companies
for a total of $287 million and upgraded its full year earnings
outlook on the back of strong trading at its retail joint
venture with Marks & Spencer.
Ocado said on Monday it was buying Kindred Systems
Inc, an advanced piece-picking robotics company, for about $262
million and Haddington Dynamics Inc, a robotic-arm designer and
manufacturer, for about $25 million.
Although Ocado has only a 1.8% share of Britain's grocery
market, its state-of-the-art technology for robotically operated
warehouses has spawned partnerships with supermarket chains
around the world, underpinning a stock market valuation of more
than 17 billion pounds ($22 billion).
Ocado, whose shares were up 6.7% at 0820 GMT, said the
purchases would enhance its robotic capabilities and accelerate
the commercial delivery of robotic picking for its clients.
They also provide an opportunity for Ocado to enter new
markets for robotic solutions outside of grocery
"That is demonstrated by Kindred Systems' robust growth,
with existing customers such as Gap and American Eagle across
the general merchandise and logistics sectors," said Ocado CEO
Tim Steiner.
The transactions will have no financial impact in the
current financial year, Ocado said. It forecast they would
increase 2021 revenue by about 30 million pounds with a small
negative impact on core earnings - earnings before interest,
tax, depreciation and amortisation (EBITDA).
Ocado also upgraded its full-year 2020 core earnings outlook
due to strong fourth quarter trading so far at Ocado Retail Ltd,
its joint venture with Marks & Spencer.
It expects full year EBITDA to be over 60 million pounds,
versus previous guidance of more than 40 million pounds.
"Ocado continues to see high demand as consumers migrate to
online grocery in record numbers," it said.
($1 = 0.7751 pounds)
(Reporting by James Davey; Editing by Louise Heavens, Paul
Sandle and Alexander Smith)
Marks & Spencer (MKS)
Ocado (OCDO)