WiseTech's biggest deal with $3.25b expansion in US
WiseTech Global will borrow $3 billion to fund its expansion in the US as the logistics software firm aims to put a series of sex scandals surrounding founder and executive chair Richard White behind it and focus on growth.
The $33.5b listed company first flagged its intention to acquire e2open earlier this month and on Monday revealed it had secured a $US2.1b ($3.25b) deal to pick up the Texas-based firm.
Its biggest-ever purchase, WiseTech said bringing on board e2open would result in a strategically significant change in global scale and reach, adding adjacent markets, customer bases and product capabilities which would allow it to create a global trade and logistics marketplace.
The deal, priced at $US3.30 a share, will be fully funding through a new syndicated debt facility from a lender group comprising 'a well-diversified mix of leading domestic and international banks'.
With 4000 employees, e2open operates in more than 20 countries and provides a connected supply chain software platform, tracking more than 18 billion transactions a year.
WiseTech shares spiked 5.6 per cent on the new to $105.64.
The purchase continues a decade-long run of acquisitions by WiseTech, with 55 deals done over that time worth $US1.2b.
Mr White described it as a pivotal moment in WiseTech's development, adding was a 'huge step' toward the company's goal of being the operating system of choice for global trade and logistics.
He said it would expand WiseTech's customer base with a network of 500,000 connected enterprises in adjacent markets including connectivity to major ocean carriers, about 5600 customers and 250-plus blue-chip customers.
'This will enable WiseTech to create a multi-sided marketplace that connects all trade and logistics stakeholders to efficiently offer and acquire services, removing complex disconnected processes and driving visibility, predictability and cost savings through the value chain,' he said.
'E2open also expands WiseTech's product capabilities with an experienced team of people with industry expertise and innovative product development skills that will further accelerate our organic growth capability.
'In bringing the two companies together, we see tremendous opportunity for synergies, efficiencies, economies of scale and enhanced customer benefits, which unlocks the potential in e2open's suite of products.
'This is a great deal for WiseTech's business and e2open's shareholders, for all our customers, the industry and ultimately the end consumer.'
The size and scale of the deal will also help WiseTech shift the spotlight off Mr White, who stepped down last year as the company's chief executive amid a board investigation into his relationship with employees.
However, he controversially regained control in February as executive chairman, despite a board-commissioned investigation finding he failed to fully disclose personal relationships with employees.
His return was preceded by the departure of four independent directors who had voiced concern about his ongoing influence.
WiseTech and Mr White are still facing shareholder unrest over his return to the company, though the billionaire told the Macquarie conference n Sydney three weeks ago he was committed to 'top-notch' corporate governance.
E2open generated revenue of $US608 million in the year to the end of February
Chief executive Andrew Appel said both businesses had complementary products across transport, logistics, supply and demand ecosystems and were poised to make better use of technology, data, automation and artificial intelligence.
'This strategic combination empowers our people, and our customers who make, move, and sell goods and services to unlock new levels of efficiency and sustainability,' Mr Appel said.
'As the connected supply chain platform, we are excited to join forces with WiseTech to create a truly global, intelligent logistics ecosystem as we jointly lead the digital transformation of our industry.'
WiseTech said it expects the deal to be earnings-per-share accretive in year one, before accounting for synergies.
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