WiseTech Global Limited Acquires UK DataFreight Ahead Of Brexit Due In 2019

  • Oct 16, 2018 AEDT
  • Team Kalkine
WiseTech Global Limited Acquires UK DataFreight Ahead Of Brexit Due In 2019
Global logistics technology provider WiseTech Global Limited (ASX: WTC) today announced the strategic acquisition of UK-based LSI Sigma Software Limited, a provider of integrated software applications for the freight forwarding, customs and warehousing management across United Kingdom. The purchase consideration has been proposed to ~$3.6 million upfront, and additional multi-year earn out potential of ~$1.4 million depending upon business performance and customer conversion rate. LSI Sigma Software Limited commonly known as DataFreight is headquartered in Southampton, UK. The company offers software solutions to logistics management, consultancy services to UK clients on customs compliance, as well as freight forwarding solutions and warehouse management for both bonded and un-bonded warehouses across UK. Currently, Charles Kendall Freight, COSCO Shipping, Maersk Lines, DACHSER and TNT International among others are already in use of DataFreight’s product and services.    With the WiseTech’s footprints in global IT solution for logistics industry, the acquisition of DataFreight’s complementary business can potentially expand the WiseTech’s presence in custom and warehouse capability, thereby delivering higher growth to the business. WiseTech Global Founder and CEO, Richard White stated that whatever be the outcome of Brexit due in March 2019, WiseTech is well positioned to offer cross-border capability to logistics providers in the UK and Europe. He added that with DataFreight’s logistics expertise and its long-term UK cross-border compliance, WiseTech eyes to expand its international capability further strengthening the local market capacity in UK and Europe’s logistics sector. DataFreight’s existing involvement on HMRC move from CHIEF to the new CDS platform provides a valuable custom capability in UK, stated Mr. White. It has been informed that post acquisition DataFreight will continue to be led by Managing Director, Ian Brown, with the aim to deliver its customs management solutions directly to its own customers, along with WiseTech’s integrated global logistics platform, CargoWise One. However, DataFreight accounts are expected to be consolidated into the books of WiseTech Global from November 2018. CargoWise One, a cloud-based software platform, is a flagship product of WiseTech. It increases supply chain efficiency through providing software as a service to simplify logistics transactions and mange users’ operations in an integrated manner. WiseTech has shown the extra-ordinary growth in earnings with 45% improvement to deliver $78 million EBITDA in FY18. The extensive growth in group’s performance is underpinned by its global growth strategy to upsurge CargoWise One demand through production innovation and geographical expansion. In a market release management stated that acquisition of DataFreight is in line with company’s strategy to accelerate long-term organic growth through acquisitions. Further, its FY18 revenue was $221.6 million, up 44%, Net profit after tax increased 28% to $40.79 million and EPS grew to 13.9 cents from 10.9 cents in previous year. Ahead of acquisition deal with DataFreight, WiseTech’s stock plunged 0.568% to close at $17.500 on 16 October 2018. The stock has seen a tremendous performance change of +76% over the past one year. However, today it traded at a PE of 126.620 x with market capitalization of $5.3 billion.

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