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Logistics software group WiseTech Global (ASX: WTC) has announced a step-change in its growth strategy through a US$2.1 billion ($3.25 billion) acquisition of Texas-based software platform e2open - the largest deal ever undertaken by the Australian group.
The buyout, which will bring on board e2open's 5,600 customers including more than 250 blue-chip clients, outstrips the total of US$1.2 billion that WiseTech has previously spent on 55 acquisitions since 2013.
The New York Stock Exchange-listed e2open operates a cloud-based platform that connects more than 500,000 manufacturing, logistics, channel and distribution partners tracking more than 18 billion transactions annually.
"Acquiring e2open is a strategically significant step in achieving our expanded vision to be the operating system for global trade and logistics,” says Richard White, co-founder and executive chair of WiseTech.
“E2open brings to WiseTech several well established complementary products. 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.”
White says that e2open will also expand WiseTech’s product capabilities and accelerate the group’s organic growth capability.
WiseTech has secured a binding agreement to acquire E2open Parent Holdings, Inc. (NYSE: ETWO) for US$3.30 per share in cash, which values the business at US$2.1 billion ($3.25 billion).
The deal will be funded from a new syndicated debt facility and, while it is subject to regulatory approvals, WiseTech notes that the sale is being supported by e2open’s major shareholders who hold sway in voting for the acquisition.
“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,” says White.
“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 was founded in 2000 and has operations in more than 20 countries delivering “a connected supply chain software platform that enables companies to transform the way they make, move, and sell goods and services”.
“E2open and WiseTech have complementary products across transport, logistics, supply and demand ecosystems, and both organisations are committed to improving the efficiency, productivity and security of global supply chains through better use of technology, data, automation and artificial intelligence,” says Andrew Appel, e2open’s CEO.
“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.
“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 says the acquisition will be earnings-per-share accretive from the first year of ownership with the deal expected to be completed in the first half of FY26.
E2open, which employs about 4,000 people globally and tracks 67 million containers annually, posted revenue of US$607.7 million ($942 million) in FY25 to deliver adjusted EBITDA of US$215.5 million ($334 million).
WiseTech anticipates that it can achieve at least US$50 million in cost savings a year, at an annualised rate, from the e2open acquisition by the end of the second year of ownership.
WiseTech also reveals today that while its current earnings outlook for FY25 remains unchanged, the company will book one-off transaction costs of about US$40 million ($62 million) from the deal announced today.
Shares in WiseTech opened strongly on the news, hitting a high of $105.72. They were up 5 per cent, or $4.97, at $105.02 at 10.12am (AEST).
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