Target Chairman and CEO Brian Cornell and Shipt founder and CEO Bill Smith.
Target Corp. (NYSE: TGT) announced Wednesday it has agreed to acquire Shipt, Inc., a leading online same-day delivery platform, for $550 million 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.
Shipt will be a wholly owned Target subsidiary, and will continue to run its business independently. It also plans to expand partnerships with other retailers seeking same-day, last-mile capabilities.
All current Shipt employees will continue to be employed by Shipt and will work from their current offices in Birmingham and San Francisco. Chief Executive Officer Bill Smith will remain in his current role, and will report to Target Chief Operating Officer, John Mulligan.
In addition to same-day delivery capabilities, Target will also leverage Shipt’s expertise as the company enhances and strengthens its supply chain, including integration with the recently acquired transportation technology company, Grand Junction.
The transaction is subject to customary closing conditions and is expected to close prior to the end of calendar year 2017. According to the company, 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.