Zebra Technologies to Acquire Rest of Fetch Robotics for $290M

Zebra Technologies (ZBRA) plans to take full control of Fetch Robotics, a provider of on-demand automation solutions for manufacturing and fulfillment environments. Fetch’s solutions help customers address the problem of labor shortages.

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Zebra intends to purchase the remaining 95% stake in Fetch that it does not already own. It expects to spend $290 million on the purchase with the money coming from its cash on hand.

“The acquisition of Fetch Robotics will accelerate our Enterprise Asset Intelligence vision and growth in intelligent industrial automation…This move will also extend our ongoing commitment to optimize the supply chain from the point of production to the point of consumption,” said Zebra CEO Anders Gustafsson.

“The Fetch team is excited to join Zebra…by helping customers dynamically optimize and holistically orchestrate their fulfillment, distribution, and manufacturing operations, together we help enable their ability to stay ahead of growing demand, minimize delivery times and address shrinking labor pools,” commented Fetch CEO Melonee Wise.

Fetch is a high gross-margin business whose annualized run-rate sales are about $10 million. Zebra expects to complete the acquisition in the third quarter of 2021. (See Zebra stock chart on TipRanks).

In May, Needham analyst James Ricchiuti reiterated a Buy rating on Zebra stock and raised the price target to $525 from $515. Ricchiuti’s new price target suggests 1.32% downside potential.

“ZBRA has entered 2021 with strong momentum up-and-down the product portfolio and across geographic regions. Organic growth of 25% in Q1 and guidance for full-year growth of 18%-21% would have been viewed as unattainable by many investors a year ago,” noted Ricchiuti.

Consensus among analysts is a Moderate Buy based on 2 Buys and 1 Sell. The average Zebra price target of $476.67 implies 10.40% downside potential from the current levels.

ZBRA scores an 8 out of 10 on TipRanks’ Smart Score rating system, indicating that the stock has strong potential to outperform market expectations.