Financial Technology

WiseTech resumes acquisition spree with $325m deal

The business is in a blackout period in the lead up to the release of its half-year results on February 22 and Mr White was not commenting further.

The deal will be funded by a combination of cash (70 per cent) and scrip (30 per cent). The $US161 million cash component will come from the company’s existing cash reserves. The shares issued will be subject to a 12-month escrow period.

WiseTech will also incur one-off transaction costs of $US10 million.

Envase has more than 1300 customers in North America, including trucking companies, ports depots and warehouses.

Its CEO Larry Cuddy Jr said joining WiseTech would give the company the scale and resources to make a bigger impact.

“Over the past few years, we have assembled and integrated a powerful suite of landside logistics solutions,” he said.

“Combined with the strength and size of WiseTech and its CargoWise platform and depth in international logistics, we have a powerful platform that we expect to further increase capacity and utilisation and drive innovation in what is an intensely complex and highly fragmented ecosystem.”

In 2020 WiseTech slowed its pace of acquisitions, shifting gears to focus on embedding and improving the many companies it had acquired.

“We’ve moved into an opportunistic mode,” Mr White told The Australian Financial Review at the time. “We’re not halting anything, but moving to a position where we have got most of what we needed to from foothold and adjacent [acquisitions].”

The Envase deal is the largest acquisition WiseTech has made by some margin, exceeding the $92 million it spent on Singaporean supply chain tracking and management software firm Containerchain in 2019.

E&P Financial technology research managing director Paul Mason said in a note that the Envase technology would support organic growth within CargoWise once it was integrated.

“An initial review of the acquisition indicates that Envase itself is a roll-up business. Based on the ongoing six-pillar R&D strategy of WiseTech including specific plans around landside logistics, we would expect WiseTech will re-run its same playbook of buying this business in order to replicate the software within CargoWise,” he said.

“As such our first impression is that this will likely support ongoing organic growth for CargoWise once integrated properly (in say 18mths time theoretically) but is unlikely to grow organically at a significant rate itself once consolidated.

“Overall we would not expect this to move the share price around much, given WiseTech is very well funded and there is no capital call on existing shareholders, and on first impression it appears to make sense in the light of WiseTech’s R&D strategy.”

WiseTech was trading flat after the announcement at $56.08 per share at 12:30pm.

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