Walmart (NYSE: WMT) backed Symbotic is poised to go public in merger a deal involving a Softbank Group Corp. blank check firm, SVF Investment Corp. Reuters reports the deal could bring the robotics and automation startup an equity value of $5.5 billion. WMT shares rose 1.80% to close at $143.57 on December 13.
Walmart operates a retail and wholesale business wherein it offers an assortment of merchandise and services through its stores.
As part of the proposed merger, the combined entity will operate under the name Symbotic Inc. trading under the “SYM” symbol on the Nasdaq. The merger is expected to close in the first half of next year. SVF, which is to take Symbotic public, raised $320 million in March.
The deal to go public is supported by private investment in public equity of $205 million in a deal involving Walmart and other investors. Gross proceeds from the deal are expected to be about $725 million.
Founded in 2007, the Walmart-backed unit boasts AI-powered software that leverages hundreds of mobile robots to enhance speed and reduce damage at distribution corners. Symbotic also offers its services in over 1,400 stores in 16 states and eight Canadian provinces. Its solutions are currently being used by retailers, grocers, and wholesalers.
Last month, MKM Partners analyst Bill Kirk reiterated a Buy rating on the stock and raised the price target to $166 from $156, implying 15.62% upside potential to current levels. According to the analyst, Walmart is well positioned vs. its competitors. The retailer has better inventory levels heading into the holidays, and its low prices will attract customers who become more price-discerning in the wake of inflation.
Consensus among analysts is a Strong Buy, based on 15 Buys and 3 Holds. The average Walmart price target of $172.11 implies 19.88% upside potential to current levels.