TMS provider Trimble announced Monday that it has completed its all-cash $1.98 billion acquisition of fellow provider Transporeon.
The transaction brings together a German cloud-based logistics services company in Transporeon that had wanted broader access to the U.S. market and a California-based firm in Trimble (NASDAQ: TRMB) that had long sought to grow beyond its borders.
Transporeon provides applications to support a global network of more than 150,000 carriers and 1,400 shippers and retailers with an integrated suite of IT tools.
Trimble funded the transaction using a combination of financing it had previously announced, including senior notes, a term loan, existing credit facilities and cash on hand.
Rob Painter, Trimble’s president and CEO, said when the deal was announced in mid-December that digital software solutions are in high demand in the commercial transportation market and that the acquisition of Transporeon represented a great opportunity.
“We’ve kept our eyes on this business for years,” Painter said at the time on an analyst call. “We are building a business for the long term and assets like this don’t come along often. We kept our balance sheet in a position to be able to act on opportunities like this. So when we got approached, we quickly engaged.”
Trimble acquired Transporeon from Hg, a private equity firm based in London. Transporeon, founded in 2000, is based in Ulm, Germany.
Transporeon generates about $130 million in sales annually, with core earnings of around $37 million. The company has predominantly been operating in Europe, but officials said at the time the deal was announced that they anticipated the company’s cloud-based solutions would be adapted to North America.
“Our current business is predominantly in Europe, but our platform works globally,” Transporeon CEO Stephan Sieber said during the same analyst call. “Now to the North American market specifically, it’s highly fragmented. There is no direct like-for-like competition, at least not at that scale. What is missing for Transporeon as a stand-alone entity is a large carrier network in the United States. This is something that really differentiates us in Europe and gives us this competitive advantage when we approach new prospects and customers. I think this is one of the big opportunities that joining Trimble holds.”
The Transporeon business will be reported as part of Trimble’s transportation segment.
Trimble tried to move into the international TMS market back in 2012, when the company acquired TMW Systems Inc. It struggled with the integration, according to Caroline Lyle, a former Trimble executive who today is head of marketing at the National Motor Freight Traffic Association, Inc.
“[Trimble] tried to do this with the existing TMW platform in South Africa/Australia, since they were English-speaking [countries], but it did not understand the nuances of how these transportation markets worked,” said Lyle at time the deal was disclosed. “It wasn’t very successful, but the plan was to go international.”
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Frank said it best:
And now the end is here
And so I face that final curtain [by buying something that won’t work in the US in a down market for $2 billion]
My friend, I’ll make it clear
I’ll state my case, of which I’m certain, [I hope]
I’ve lived a life that’s full
I traveled each and every highway [but just in Europe],
And more, much more than this
I did it, I did it my wayyyyyyyyyy
🤣😂