In the supply chain software provider’s earnings call in June, Descartes Systems Group’s CEO explained the company’s recent spree of acquisitions in order to fulfill customers’ growing business needs.
“We listen to our customers about where to invest for the future, and as a result, our acquisition strategy is very much customer-driven,” said Edward J Ryan.
“Last year, we bought three businesses and this year we’ve already bought two. We believe there continues to be a number of good quality, profitable businesses that make sense to be a part of the global logistics network, and that will be a big benefit to our customers. We believe combining with good businesses makes us a better company, and it will remain a large part of our plans going forward.”
Related Article: Descartes acquires Portrix to improve logistics providers’ digital customer experience
On Tuesday, Descartes (NASDAQ:DSGX) announced it has added another strategic acquisition to the list with its purchase of GreenMile, a cloud-based mobile routing solution with a deep customer base in food and beverage including Coca-Cola (NYSE:KO), Pepsico Inc. (NASDAQ:PEP) and Heineken.
Descartes purchased the Orlando, Florida-based routing solution for up-front cash consideration of $30 million with a potential performance-based all-cash earn out of $10 million if GreenMile achieves undisclosed revenue-based targets over the first two years post-acquisition.
“GreenMile has built a great business by focusing on the unique challenges faced by retail food and beverage distribution companies,” said Andrew Roszko, executive vice president of commercial operations at Descartes, in the release. “Their mobile applications are used by drivers around the world to improve their productivity and provide real-time delivery visibility to enhance customer service.”
Acquisition details: Descartes Systems Group
|Acquisition price||$30 million up-front cash consideration with potential $10 million performance-based all-cash earn out|
|Acquirer revenue run rate||$363.8 million|
|Recent acquisitions by acquirer||Portrix (May 2021) and QuestaWeb (March 2021)|
These applications cover a vast array of productivity tools to help improve a company’s supply chain operations and in-house productivity with solutions for driver visibility, merchandiser routing, and even tracking and reporting for line cleaners and technicians.
“The platform is complemented with advanced analytics and delivery performance management tools to provide managers in the field and corporate leadership with a comprehensive view of field operations,” said Roszko. “When combined with Descartes’ advanced route optimization tools, we believe it presents a compelling proposition to help distributors improve their final-mile delivery operations.”