ASX-listed logistics software giant WiseTech Global is betting more than 10% of the company’s current value on buying NYSE-listed US rival E2open for $2.1 billion (A$3.2bn).
WiseTech shares rose 4.7% today to close at A$104.75 on the news.
The 25-year-old Texas cloud-based SaaS platform reportedly connects more than 500,000 manufacturing, logistics, channel, and distribution partners as one multi-enterprise network tracking over 18 billion transactions annually.
The deal is the largest made by WiseTech (ASX: WTC) and heralds a return to the strategy billionaire founder Richard White has long pursued in growing the business by bolting on other companies from around the world.
White, who returned to the business as executive chairman earlier this year following the resignation of four WiseTech directors, now has the role of chief innovation officer. He resigned as CEO last October amid allegations of inappropriate behaviour. The board subsequently found that he “made inaccurate and incomplete disclosures concerning the nature and duration of his relationship” with two employees.
The e2open acquisition shows White, who owns around a third of the company, worth around $33.5 billion, is firmly in charge once again.
“E2open brings to WiseTech several well established complementary products,” he said announcing the deal to the market.
“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.”
It also suggests he sees value in the business missed by US investors, with the $US3.30 (A$5.07) per share offer at a 28% premium to Friday’s e2open (NYSE: ETWO) closing price, amid a fall 46% in value over the last 12 months, from a peak of US$4.93 and a dip of $1.75.
The acquisition, transaction costs and working capital requirements will be funded through a new syndicated debt facility worth US$3 billion.
It includes US$1.2bn in cash consideration to Emerald shareholders, gross debt (exclusive of debt-like items) of $1.1b and $0.2b in cash.
The merger expands WiseTech’s customer base by around 5,600, including 250+ blue-chip customers.
“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, White said.
“This is a great deal for WiseTech’s business and e2open’s shareholders, for all our customers, the industry and ultimately the end consumer.”
e2open’s CEO Andrew Appel said said the two businesses have complementary products across transport, logistics, supply and demand ecosystems.
“Both organizations are committed to improving the efficiency, productivity and security of global supply chains through better use of technology, data, automation and artificial intelligence,” he 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.”
E2open and WiseTech will operate as independent companies until the transaction closes in the first half of FY2026.
WiseTech’s earnings outlook for FY25 remains unchanged, except for approximately US$40m of one-time transaction costs.
Meanwhile, White has sold $440 million worth of shares in late 2024, and $200 million more this year, while also buying out his cofounder, Maree Isaacs, in RealWise Holdings, the company that owns more than a third of the company.
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