There seems to be no stopping of significant supply chain technology focused technology announcements incurring this week. Who knew that so many public relations, product management and executive teams targeted this week for announcements. Candidly, we would have added most of these announcements to our This Week in Supply Chain Tech column, but alas that might have been a very long blog posting.
In addition to highlighting news involving Descartes, we have another one scheduled to subsequently publish.
Canadian based logistics SaaS technology platform provider Descartes Systems Group has announced the acquisition of United Kingdom based Cracking Logistics Limited, dba “Kontainers”, a provider of client-facing digital freight execution platforms.
According to the announcement, the deal involves total consideration of up to $12 million, with up-front consideration of up to $6 million plus potential performance consideration. The up-front consideration was reportedly satisfied by cash on hand and the maximum consideration amount payable under the all-cash performance-based-earn-out is noted as $6 million, based on the acquiree’s achieving revenue-based targets in each of the first two years of post-acquisition.
The Kontainers technology essentially allows shipping lines, freight forwarders or third-party logistics providers (3PLs) around the world to facilitate a digital customer experience including quoting, booking, tracking and dashboard analytics. The company’s digital freight platform provides the ability to create branded state-of-the-art digital experiences for their end customers. Kontainers’ technology also helps API-enable logistics services providers while preserving their investments in existing rate management and back-office systems. Lighthouse customers are listed as Maersk Shipping Line, Toll Group and Ceva Logistics.
Graham Parker, a Co-Founder of Kontainers, will reportedly assume the role of Vice President Sales, Digital Freight Solutions at Descartes.
Descartes claims to support the globe’s largest, collaborative multimodal logistics community with its broad-based services support technology. In its most recent first-quarter financial performance, the technology provider announced a corporate restructuring that included a reported 5 percent reduction in the company’s global workforce.
Supply Chain Matters Perspectives
Both prior to, during and after COVID-19, logistics services providers will remain under customer pressure to digitize their processes with near real-time access to needed logistics and in-transit information. They must do so with tighter margins and needs for increased liquidity in the midst of overall volume declines.
The opportunity provided with this acquisition is the integration of Kontainers digital freight execution with Descartes rate management and forwarder enterprise systems.
As our readers might have surmised in our weekly This Week in Supply Chain Tech column, the investment market for start-up or fast-growing digital logistics platforms has been red hot. With that stated as the backdrop, the total sum of up to $12 million seems like a bargain within today’s logistics technology landscape. The appearance of a two-year performance-based consideration is a further indicator that the acquiree needs to demonstrate consistent growth.
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