Target to buy same-day delivery platform Shipt for $550M in cash
Target (TGT) announced it has agreed to acquire Shipt, Inc., an online same-day delivery platform, for $550M in cash.
Target will leverage its network of stores and Shipt’s proprietary technology platform and community of shoppers to quickly and efficiently bring same-day delivery to guests across the country.
The acquisition significantly accelerates Target’s digital fulfillment efforts, bringing same-day delivery services to guests at approximately half of Target stores by early 2018.
The service will be offered from the majority of Target stores, and in all major markets, before the 2018 holiday season.
At launch, Target will offer same-day delivery of groceries, essentials, home, electronics and other products, while expanding the products offered over time.
By the end of 2019, same-day delivery will include all major product categories at Target.
The transaction is subject to customary closing conditions and is expected to close prior to the end of calendar year 2017. This all-cash acquisition will be immaterial to Target’s near-term financial results.
It is expected to be modestly accretive to the company’s earnings per share in 2018, while accelerating digital and total sales growth over the medium term.
“We laid out an ambitious strategic agenda in early 2017, which included a focus on giving our guests a number of convenient ways to shop with Target, whether it’s ordering online and picking up in one of our stores, driving up to pick up an order, or taking advantage of services like our new Restock program.
With Shipt’s network of local shoppers and their current market penetration, we will move from days to hours, dramatically accelerating our ability to bring affordable same-day delivery to guests across the country,” said John Mulligan, EVP and COO for Target.
“By the 2018 holiday season, we will be servicing every major market across the country with same-day delivery, and Shipt’s service-oriented approach aligns well with Target’s commitment to delivering an exceptional shopping experience for our guests.”
TGT is up $1.10 to $62.13 on the news.
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