In morning trade the WiseTech Global Ltd (ASX: WTC) share price has edged higher after the serial acquirer announced its latest acquisitions.
At the time of writing the logistics platform provider’s shares are up almost 1% to $10.26.
What has WiseTech Global acquired this time?
WiseTech Global Limited has snapped up two leading Latin American freight forwarding and logistics solutions providers, Forward and Softcargo, and a leading French customs solutions provider, EasyLog.
According to the release, the aggregate consideration for these acquisitions comprise $10.1 million upfront plus further multi-year earnouts of up to $14.9 million. These relate to activities for integration, native CargoWise One product development, customer conversion, and revenue growth.
As with its previous acquisitions, these transactions are of strategic value and are not expected to be financially material. Management estimates that the three companies combined generated revenue of $6.7 million and EBITDA of $0.8 million in 2017. They are expected to be consolidated into WiseTech Global accounts from May 2018.
What do the companies do?
Argentina-based Forward offers freight forwarding management and accounting compliance solutions across South America and counts the likes of Damco, Delfin Group, Yusen Logistics, and Zach Logistics as customers.
Softcargo is a freight forwarding management and logistics solutions provider based in Montevideo, Uruguay. It operates across Chile, Colombia, Mexico, Uruguay and Argentina to customers such as Senator International, Röhlig, DB Schenker and Kerry Logistics.
France-based EasyLog provides a range of customs clearance and tracking solutions to customers including DHL Global Forwarding, Nippon Express, Air France Industries, and Sanofi.
Management believes that the acquisition of EasyLog is a key step in building out its European customs capabilities.
Should you invest?
Although these acquisitions may not be material, they could be stepping stones to a brighter future for the company. Which could arguably make WiseTech Global a great buy and hold investment option.
However, with its shares trading at 77x estimated forward earnings, I plan to wait to see if I can buy in at a more attractive price.
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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of Altium, Appen Ltd, and WiseTech Global. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.
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