Global logistics solutions group (ASX: WTC), WiseTech Global, made an announcement this morning about the acquisition of CargoIT i Skandinavien (‘CargoIT’), who is the leading customs management and logistics solutions provider in Sweden.
Headquarters of CargoIT is in Stockholm. It provides support by providing customs management solutions followed by their freight forwarding, warehousing and transportation solutions over 100 customers. The key customer of CargoIT includes DHL, Kerry Logistics, SAS Cargo, Clas Ohlson, Mondelez International, Mitsubishi Motors, Hyundai, and many other logistics providers and organizations.
Richard White who is the Global Founder and CEO of WiseTech finds the acquisition of CargoIT a way to have a strong grip in the active trade regions of Sweden. Sweden is a highly developed market and the largest in Scandinavia. CargoIT has considerable experience in Swedish customs solutions. The company’s amalgamation with CargoIT will enhance our provision of providing solutions to integrated cross-border logistics organizations worldwide. This is possible when WTC’s global expertise and extensive development capabilities combines with CargoIT experience of Swedish customs solutions.
The purchase cost for acquiring CargoIT will comprise approximately $1.8 million upfront. Apart from that a further amount of $1.8 million as expected multi-year earn-out potential in relation to the integration of business and product and revenue performance. From November 2018, CargoIT is expected to consolidate its account with WiseTech Global accounts.
The company has made further acquisitions in countries like, Australasia, Argentina, Brazil, Belgium, Canada, France, Germany, Italy, Ireland, the Netherlands, North America, Taiwan, Spain, Turkey, the UK and Uruguay. The company has a long term organic growth strategy through these targeted valuable acquisitions. This foothold transaction will be a form a channel in between the company with its targeted acquisitions.
For the year ended 30 June 2018, there is an increase in revenue through high innovation and product development investment by 34%. From the low sales and marketing expense the company was able to generate 11% of the revenue from 9% of its people. There was an increase in the EBITDA by 45% which is equivalent to $78 million. The EBITDA margin got increased by 35%. The NPAT was $40.8 million. The total asset of the company is $537.226 million and total liabilities is $185.071 million. It represents that company can meet its long term obligations. The current asset of the company is $160.779 million and total current liabilities of the company is $79.57 million. This indicates that company can meet its working capital requirements and other short term obligations. The total shareholders equity is worth $352.155 million. The net cash inflow from operating activities was $74.175 million where the major cash outflow was due to the payment made to the suppliers and the employees and income tax. The company acquired business, made payment of the intangible asset as a result of which the net cash outflow from the investing activities was $143.033 million. The net cash generated from the financing activities was $88.840 million. There was a net increase in the cash equivalent worth $19.982 million. As a result of this the cash and cash equivalent at the end of the year is $121.824 million.
The current market price of the share is A$15.78 with a market capitalization of $4.95 billion and PE ratio 118.35x.
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