TMS consolidation: Kewill buys LeanLogistics for $115m

Acquiring the cloud-based multi-tenant TMS and managed transportation services provider will allow Kewill to expand the customer base of LeanLogistics’s platform through its broader global reach.    The transportation and global trade management software company Kewill has acquired Holland, Mich.-based TMS provider LeanLogistics for $115 million, the companies said late Monday night.
   The deal represents a significant piece of consolidation in the fragmented TMS software market, though both Kewill and LeanLogistics are among a handful of providers that have true global transportation execution capabilities.
   Kewill’s MOVE platform include TMS, warehouse management, yard management, and global trade management capabilities, while LeanLogistics focuses more specifically on transportation procurement and management, primarily across trucking and ocean modes. The company was set to release a parcel execution extension in the coming months.
   Kewill, with headquarters in Manchester, U.K., and Chelmsford, Mass, purchased LeanLogistics from its parent company, the Australian holding company Brambles. LeanLogistics was bought by Brambles eight years ago for $53 million.
   “Over the eight years that we have owned the business, LeanLogistics has generated significant value as a service provider to other parts of the Brambles Group, in particular the CHEP pallet-pooling operations,” Brambles Chief Executive Officer Tom Gorman said, according to a report in The Australian. “We are looking forward to continuing this relationship as a LeanLogistics’ customer for many years to come.”
   Gorman told the newspaper that Brambles believed LeanLogistics had maximized its value “given the specialized nature of LeanLogistics’s business.”
   LeanLogistics held its user conference in Chicago two weeks ago, with bullish messages from Chief Commercial Officer Chris Timmer and Chief Technology Officer Chris Johnson about the company’s customer growth and roadmap. Lean had recently released new extensions to its TMS to provide ocean shipping procurement and execution, and the ability to manage and optimize dedicated and fleet trucking capacity in a single application with for-hire capacity.
   “We believe we can quickly integrate some key capabilities into LeanTMS such as yard management, deficit rating, shipment tracking and settlement for rail, to more comprehensively serve the needs of our customers,” Timmer said in a statement about the acquisition. “We also see the opportunity to accelerate our parcel functionality while being able to add entirely new customs and compliance capabilities.”
   Kewill said the deal will allow it to expand the customer base of LeanLogistics’s platform through Kewill’s broader global reach. Kewill has its own set of cloud- and on-premised based TMS options. In late 2014, it purchased the Sterling Commerce TMS from IBM to target shippers that wanted to manage their own transportation using a multi-tenant, cloud-based environment.
   Multi-tenant software is designed to allow all customers of a solution to benefit from the network connections and software upgrades for any single user.
   LeanLogistics’s product is multi-tenant and subscription-based, while a significant proportion of the company’s revenues also come from its managed transportation services unit, where it essentially acts as the transportation department for its customers by providing the software and running the system.
   “Their solutions are feature-rich, highly scalable and managed by a skilled team and we are excited to support the ongoing growth and investment in LeanLogistic’s platform,” said Doug Braun, CEO of Kewill. “We believe our global platform will help accelerate LeanLogistics’ already impressive growth through leveraging our extensive European and Asian networks.” 
   It’s unclear immediately whether Kewill will retain the LeanLogistics brand, but the company did say LeanLogistics’s sprawling headquarters in western Michigan will become Kewill’s largest single office.
   “We see an exciting culture and talent pool in, and around, Holland, Michigan and view the team as a critical part of the combined organization,” Braun said. “We fully intend to build around this office and leadership team in the coming months. We respect the LeanLogistics team’s ability to drive the business forward, and will look for ways to be supportive of its existing initiatives. We strongly believe we can accelerate the success LeanLogistics has been experiencing.”
   American Shipper’s May cover story, “Global TMS Comes of Age,” looks at the global transportation management market, including comments from Kewill and LeanLogistics executives.