The WiseTech Global Ltd (ASX: WTC) share price has failed to follow the market higher in morning trade.
At the time of writing the logistics solutions company's shares are down almost 1% to $20.15 despite announcing a new acquisition.
What has WiseTech Global acquired?
This morning WiseTech Global announced the acquisition of Norway-based customs management solutions provider Systema AS.
According to the release, Systema provides customs and logistics management solutions to customers in Norway, Denmark and Sweden. These customers include the likes of DACHSER, DHL, DSV, Norsk Trailer Express, Schenker, PostNord, and many other logistics providers and organisations.
The company has paid ~$3 million upfront for Systema, with a further expected multi-year earn-out potential of around $2.7 million. This relates to business and product integration and revenue performance.
For the year ended December 2017, Systema generated annual revenue and EBITDA of ~$2.5 million and ~$0.3 million respectively. Systema is expected to be consolidated into WiseTech Global's accounts from February 2019.
WiseTech Global's founder and CEO, Richard White, believes the acquisition will deepen its footprint in the Nordic region.
He said: "Systema's valuable customs and cross-border expertise will deepen our footprint in the Nordic region's three largest markets, Norway, Denmark and Sweden. Systema's Norwegian customs solutions experience combined with our powerful global innovation and development capabilities, and CargoWise One platform, will enhance integrated crossborder logistics solutions to thousands of logistics organisations worldwide."
He also believes the acquisition is in line with its "strategy of accelerating long-term organic growth through targeted, valuable acquisitions."
Should you invest?
Given the size of the acquisition, it is unlikely to move the needle too much in the short term and I wouldn't make an investment decision purely on the back of it.
But I agree with Mr White that it has the potential to accelerate its long-term organic growth along with the countless other acquisitions it has made over the last 12 to 18 months.
Overall, I think WiseTech Global could be an outstanding long term investment along with fellow tech stars Altium Limited (ASX: ALU) and Appen Ltd (ASX: APX). Though, it is a high risk option due to the high multiples its shares trade on.
