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ASX 200 tech share WiseTech wobbles on $327 million US acquisition

The ASX 200 tech share is expanding its footprint in the North American logistics markets.

Posted by
Bernd Struben
Author bio Bernd Struben earned his BA in economics from the University of Michigan in 1991, with post-graduate studies in environmental economics at the University of Connecticut. Over the years he’s written about and analysed the tourism industry in the Caribbean; Europe’s commercial real estate markets; and, since moving to Australia in 2010, global and Aussie share markets. Bernd studies geopolitical and macroeconomic trends, alongside sector and company specific data, to gauge what he believes could be tomorrow's best investments. In his free time, you might find Bernd at the beach with his family or working on his next science fiction novel. Areas of expertise Australian and global share markets Macroeconomic and geopolitical trends Real estate Education Economics, University of Michigan Favorite investment quote "The four most dangerous words in investing are: 'This time it's different." — Sir John Templeton
Published
Key points
  • The WiseTech share price is in the green after slipping in early trade
  • The ASX 200 tech share is acquiring US-based Envase Technologies for US$230 million
  • The acquisition will be funded with 70% in cash and 30% in new WiseTech shares issued to the vendors

S&P/ASX 200 Index (ASX: XJO) tech share WiseTech Global Ltd (ASX: WTC) is edging into the green after falling in early trade.

The logistics software developer's shares closed yesterday trading for $56.05 each and are currently swapping hands for $56.08 apiece, 0.05% higher. That's after recovering from a drop of 0.1% at $55.50 a share this morning.

It comes after the blue-chip technology stock announced a major United States acquisition.

Truck driver sits in cab using laptop

Image source: Getty Images

What acquisition was announced?

The WiseTech share price slipped after the ASX 200 tech share reported it has acquired US-based Envase Technologies in a transaction valued at US$230 million (AU$327 million).

Envase provides transport management system software for trucking and landside logistics in North America. WiseTech is acquiring the company from private investment business Firmament and a few other sellers.

With more than 1,300 customers across North America, WiseTech expects Envase to generate some US$35 million of revenue in the 2023 calendar year. The ASX 200 tech share forecasts an earnings before interest, taxes, depreciation and amortisation (EBITDA) margin in the low to mid 20% range.

Commenting on the acquisition, WiseTech CEO Richard White said:

This is a strategically significant acquisition in landside logistics, which extends and strengthens our position in one of our six key CargoWise development priority areas, and we're extremely pleased to have the Envase team join the WiseTech Global group.

Envase CEO Larry Cuddy added:

Over the past few years, we have assembled and integrated a powerful suite of landside logistics solutions. Combined with the strength and size of WiseTech and its CargoWise platform and depth in international logistics, we have a powerful platform that we expect to further increase capacity and utilisation and drive innovation in what is an intensely complex and highly fragmented ecosystem.

WiseTech said it will fund the acquisition with 70% cash (US$161 million) and 30% new WiseTech Global shares issued to the vendors (equivalent to US$69 million).

The ASX 200 tech share expects the acquisition to be completed in February.

How has this ASX 200 tech share been tracking?

The WiseTech share price is off to a strong start in 2023, up 13%.

As you can see in the chart below, the ASX 200 tech share has gained 16% over the past 12 months.

Motley Fool contributor Bernd Struben has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has positions in and has recommended WiseTech Global. The Motley Fool Australia has positions in and has recommended WiseTech Global. 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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