New joint venture, GreenBox, to offer first of its kind automated warehouse services, unlocking significant new addressable market
Symbotic and GreenBox contract for the sale of approximately $7.5 billion in systems over the course of the contract
Joint venture aims to expand access to Symbotic systems to broad range of customers through new “as a service” offering
SoftBank Group and Symbotic own 65% and 35% of GreenBox, respectively
SoftBank Group Corp. (TSE: 9984, “SoftBank”) and Symbotic Inc. (Nasdaq: SYM), a leader in A.I.-powered automation technology for the supply chain, today announced the establishment of GreenBox Systems LLC (“GreenBox”), a new joint venture to address the more than $5001 billion annual warehouse-as-a-service market opportunity. Concurrently, Symbotic also announced an approximately $7.5 billion new customer contract with GreenBox, who will be the exclusive provider of Symbotic systems in the warehouse-as-a-service market, and will make supply chain services available to customers.
GreenBox will automate supply chain networks globally by operating and making accessible Symbotic’s advanced A.I. and automation technology for the warehouse. Symbotic’s A.I.-powered robotics and software technology will be the cornerstone of GreenBox, installed in single and multi-tenant facilities. The efficiency, SKU agility, scalability, and density of the Symbotic system allows GreenBox to effectively manage single and multi-tenant facilities across the supply chain and thus fundamentally reshape the economics of automated supply chain services.
Enabled by these technologies, GreenBox customers will be able to reduce inventory and costs while boosting SKU count and agility, all without associated capital expenditures and operational complexity.
“We are pleased to partner with SoftBank in this venture that accelerates our shared vision to transform the supply chain,” said Rick Cohen, Symbotic’s Chairman and CEO. “GreenBox enables Symbotic to bring the benefits of our technology to a broader customer universe, expanding our market opportunity.”
“GreenBox taps into the powerful potential of A.I. and other enabling technologies in supply chains, while also making the benefits of automation accessible to more businesses through an ‘as-a-service’ offering. In partnership with Symbotic, GreenBox will equip customers with more intelligent, streamlined, and scalable warehousing solutions while eliminating the burden of major capital expenditures,” said Vikas J. Parekh, Managing Partner at SoftBank Investment Advisers.
GreenBox will order Symbotic’s systems over a six-year period commencing in fiscal year 2024, to be implemented across its warehouse network in larger-scale deployments than Symbotic’s current installed base systems. Symbotic expects in excess of $500 million in annual recurring software, parts and services revenue from GreenBox once all systems are operational. Symbotic systems typically become fully operational within 24 months of project design approval.
GreenBox’s board of managers will comprise three managers, one nominee from each of Symbotic and SoftBank, and one independent manager. GreenBox’s management team will be independent from Symbotic and SoftBank.
Transaction and Implementation Details
SoftBank and Symbotic own 65% and 35% of GreenBox, respectively, with the joint venture established today. GreenBox will initially be funded with $100 million of capital contributed pro rata by Symbotic and SoftBank to fund operating expenses and initial system purchases. After Symbotic’s initial $35 million pro rata capital contribution, the contract is expected to be accretive to Symbotic’s annual free cash flow (net of capital contributions).
Symbotic has issued warrants to SoftBank representing up to 2.0% of Symbotic’s fully diluted shares outstanding, which will vest in 0.25% increments upon payment of each $937.5 million to Symbotic for installation of Symbotic systems under the GreenBox contract. The warrants have a 6-year term and strike price representing Symbotic’s 45 trading day volume weighted average price (VWAP) as of July 21, 2023, of $41.9719 per share.
Separately, SoftBank has purchased approximately 17.8 million shares from Symbotic Chairman and CEO, Rick Cohen, at Symbotic’s 45 calendar day VWAP as of May 26, 2023, of $28.05 per share. This sale is 100% secondary shares and will not result in any dilution to Symbotic shareholders.
An investor presentation with additional detail is available in the Investor Relations section of the company’s website at https://ir.symbotic.com/news-events/events-presentations.
Goldman Sachs & Co. LLC served as exclusive financial advisor and Sullivan & Cromwell LLP as legal advisor to Symbotic.
Investor Call Details
Symbotic plans to hold an investor call on Monday, July 24, 2023, at 8:00 a.m. ET to discuss this announcement. The call will be hosted by Rick Cohen, Chairman and CEO, Bill Boyd, Chief Strategy Officer, and Tom Ernst, Chief Financial Officer. The webcast can be accessed live from the following link: https://edge.media-server.com/mmc/p/mb6qxj2g.
Symbotic’s end-to-end automation consists of a fleet of fully autonomous robots with advanced vision and sensing capabilities. These robots induct, store, retrieve and palletize products in their native packaging at industry-leading throughput rates and with 99.9999% accuracy. Symbotic’s A.I.-powered software orchestrates the work of hundreds of mobile robots to fulfill customer orders from within the high-density buffering and storage structure that flexibly handles virtually unlimited SKUs. The A.I.-enabled system builds mixed-SKU pallets with unmatched speed and efficiency, ultimately changing the way consumer goods are moved through the supply chain. The disruptive technology enhances warehouse density and capacity; increases inventory turns, reduces errors and waste; and enables faster fulfillment of customer orders. Currently, Symbotic systems service more than 2,600 stores for some of the world’s largest retailers, grocers and wholesalers, including Walmart, Albertsons and C&S Wholesale Grocers.