Costco's $1 billion acquisition furthers last-mile capacity
Costco Wholesale Corp. has completed the acquisition of Innovel Solutions, a leading provider of third-party end-to-end logistics solutions with nationwide capabilities. Innovel was a subsidiary of Transform Holdco LLC, which operates Sears and Kmart stores. The purchase price of $1 billion was funded from the company’s existing cash balances.
Innovel has for decades provided Sears and, more recently, third parties with final mile delivery, complete installation and white glove capabilities for big and bulky products across the United States and Puerto Rico. Innovel’s network offers coverage to nearly 90 percent of the U.S. and Puerto Rico.
It employs over 1,500 people and operates 11 distribution/fulfillment centers and over 100 final-mile cross-dock centers, with over 15 million square feet of warehouse space. The company also operates dedicated call centers.
Costco has been a customer of Innovel since 2015. “We have had a great relationship with Innovel and share a philosophy of taking care of our members," said Craig Jelinek, Costco’s chief executive officer. "We believe the acquisition will allow us to grow our Ecommerce sales of big and bulky items at a faster rate.” Under Costco’s ownership, Innovel will continue to serve Sears and other existing third-party customers.
Costco currently operates 786 warehouses, including 547 in the United States and Puerto Rico, 100 in Canada, 39 in Mexico, 29 in the United Kingdom, 26 in Japan, 16 in Korea, 13 in Taiwan, 11 in Australia, two in Spain, and one each in Iceland, France and China. Costco also operates e-commerce sites in the U.S., Canada, the United Kingdom, Mexico, Korea, Taiwan, Japan and Australia.