- WiseTech Global (WTC) splashes out US$414 million (A$602 million) on the purchase of intermodal rails solutions specialist Blume Global
- WiseTech expects to fund the transaction via a combination of existing cash reserves, debt from new facilities, and new WTC shares to be issued to the vendors
- The deal is hoped to extend WiseTech’s presence in landside logistics through the addition of rail services
- WiseTech Founder and CEO Richard White says this marks another “strategically significant acquisition” following the takeover of Envase Technologies last month
- WiseTech Global shares are down 3.7 per cent to $56.45 at 11:21 am AEDT
WiseTech Global (WTC) has splashed out US$414 million (A$602.35 million) on the acquisition of intermodal rails solutions specialist Blume Global.
WiseTech, the developer of logistics execution software CargoWise, announced the acquisition this morning.
Blume manages intermodal containers and chassis on behalf of nearly 86 per cent of the class-one US railroads, ocean carriers and other intermodal equipment providers.
Wisetech said the company was a “high-growth recurring revenue business” and was expected to generate FY24 revenues of up to US$70 million (A$101.8 million).
WiseTech Founder and CEO Richard White said this marked another “strategically significant” acquisition for the company following its takeover of Envase Technologies last month.
“It further extends our capability in one of our six key CargoWise development priority areas, integrating rail into our landside logistics offering in North America — the most complex and largest logistics region in the world,” Mr White said.
“Blume also brings significant new talent, a portfolio of other valuable product capabilities, and further enhances our product development skill set.
“This transaction demonstrates WiseTech’s continued investment in its CargoWise ecosystem, improving visibility and process efficiencies end-to-end across the supply chain for our customers.”
WiseTech expects to fund the transaction via a combination of US$134.8 million from existing cash reserves, US$155 million of debt from new facilities and US$124.2 million in new WiseTech shares issued to the vendors. This represents a funding mix of 70 per cent cash and 30 per cent shares.
In addition, one-off transaction costs of approximately US$10 million (A$14.5 million) will be funded from existing cash reserves.
On completion of the transaction, WiseTech Global expects to have available liquidity of approximately $400 million from existing cash reserves and undrawn debt facilities in addition to ongoing strong free cash flow generation.
The transaction is subject to terms and US regulatory approval and is expected to be completed in April 2023.
WiseTech Global shares were down 3.7 per cent to $56.45 at 11:21 am AEDT.