WiseTech's shopping spree continues with another acquisition

WiseTech Global Ltd (ASX: WTC) has bought a messaging solutions provider.

| More on:
a woman

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Just two months after its last acquisition software logistics business WiseTech Global Ltd (ASX: WTC) has moved to acquire 'messaging solutions provider' Xware for $12 million plus potential multi-year earn outs related to revenue growth and other general performance targets.

For a $7.3 billion business like WiseTech the acquisition is not material in itself and WiseTech recently raised over $300 million in cash from investors to fund its strategy of acquisitive growth to help it build a market-leading product that has competitive advantages around the world.

A lot of share market businesses attempt an aggressive acquisition strategy as part of their overall growth, but surprisingly few succeed over the long term and it's only a year or two after the acquisitions have been completed that investors will see their success or not flow through to the group's financials.

As such WiseTech remains a high risk / high reward bet given its strategy and valuation.

The stock is down 3% to $22.42 today but probably not in response to the acquisition news, as it commonly rises or falls by this kind of percentage depending on swinging investor sentiment over the outlook for the business and tech sector in general.

For example other software players like Pro Medicus Limited (ASX: PME) and AfterPay Touch Group Ltd (ASX: APT) are both up 3% or more on no material news.

Tom Richardson owns shares of AFTERPAY T FPO and Pro Medicus Ltd. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns shares of and recommends Pro Medicus Ltd. The Motley Fool Australia owns shares of AFTERPAY T FPO and WiseTech Global. The Motley Fool Australia has recommended Pro Medicus Ltd. 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.

More on Share Fallers

A young man clasps his hand to his head with his eyes closed and a pained expression on his face as he clasps a laptop computer in front of him, seemingly learning of bad news or a poor investment.
Share Fallers

Why Burgundy Diamond Mines, Clarity Pharmaceuticals, EML, and Zip are sinking today

These ASX shares are ending the week in the red. But why?

Read more »

A worried man holds his head and look at his computer.
Share Fallers

Why 29Metals, Brainchip, Platinum, and Premier Investments shares are falling today

These ASX shares are having a tough time on hump day.

Read more »

Man with his head in his head because of falling share price.
Share Fallers

Why 29Metals, Atlas Arteria, IDP Education, and Mineral Resources shares are falling

These ASX shares are having a tough time on Tuesday. But why?

Read more »

A man sits in despair at his computer with his hands either side of his head, staring into the screen with a pained and anguished look on his face, in a home office setting.
Share Fallers

Why ALS, EOS, NRW, and Patriot Battery Metals are dropping today

These ASX shares are starting the week in the red.

Read more »

A man looking at his laptop and thinking.
Technology Shares

Why are these ASX tech shares getting smashed today?

Owners of these two stocks are missing out today.

Read more »

a man weraing a suit sits nervously at his laptop computer biting into his clenched hand with nerves, and perhaps fear.
Share Fallers

Why AGL, Brickworks, IGO, and New Hope shares are dropping today

These ASX shares are having a poor session. But why?

Read more »

Frustrated stock trader screaming while looking at mobile phone, symbolising a falling share price.
Share Fallers

Why Amcor, Arafura, Brainchip, and South32 shares are tumbling today

These ASX shares are having a tough time on hump day. But why?

Read more »

A young woman holds an open book over her head with a round mouthed expression as if to say oops as she looks at her computer screen in a home office setting with a plant on the desk and shelves of books in the background.
Share Fallers

Why Aussie Broadband, Liontown, Metals Acquisition, and Seek shares are falling

These ASX shares are having a poor session. But why?

Read more »