Descartes, the 17th-century French mathematician, built his philosophy around acquiring knowledge. Descartes, the 21st-century logistics business, meanwhile, is building its philosophy around acquiring companies.
The Ontario, Canada-based software-as-a-service solutions provider on Monday announced that it purchased e-commerce shipping solutions company XPS Technologies for $65 million, rising to $75 million if certain revenue-based targets are met. XPS is Descartes’ (NASDAQ: DSGX) sixth acquisition since the beginning of 2021.
Utah-based XPS works directly with e-commerce shippers of all sizes to provide multi-carrier parcel shipping services. The company’s software automatically imports orders, compares carrier rates, provides end-to-end order tracking and prints shipping labels for all major carriers. It also offers a white-label shipping platform to logistics services providers.
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“Combining with XPS adds e-commerce domain expertise, advanced parcel shipping technology and a community of more than 10,000 customers,” said Andrew Roszko, Descartes’ EVP of commercial operations. “Many of today’s small and medium e-commerce retailers will be the major enterprises of tomorrow, and our integrated e-commerce shipping and fulfillment solutions are designed to help these businesses through all phases of growth.”
The XPS deal is the latest in a string of acquisitions that have helped Descartes grow its flagship Global Logistics Network. A modular SaaS solution, the platform is used by customers to route, schedule and track deliveries, plan, allocate and execute shipments, and handle invoices, customs and security documents — among other capabilities.
Descartes has been inhaling companies left and right since March 2021. Foreign trade zone solution QuestaWeb kicked off the spending spree that month, followed shortly by the acquisition of global rate management solution Portrix Logistics Software. Capping off 2021’s M&A activity was the purchase of cloud-based mobile routing solution GreenMile in July.
So far in 2022, Descartes has been even busier. It added e-commerce customs filing provider NetCHB for $40 million upfront in February, enhancing its cross-border capabilities. Then in April, the company bought route optimization firm Foxtrot for $4 million.
Now, in what looks to be its largest deal to date, Descartes is folding in XPS for up to $75 million.
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“XPS complements our significant recent investments in the e-commerce fulfillment and shipping space,” said Descartes CEO Edward J. Ryan. “We welcome the XPS customers, employees and partners to the Descartes community and, together, look forward to helping the community manage the full life cycle of domestic and international ecommerce shipments.”
While some acquisitions like Just Eat Takeaway’s costly purchase of Grubhub can tank a company’s revenue, that hasn’t been the case for Descartes so far. Just last week, the company reported record revenue figures in its Q1 2023 earnings announcement, growing revenues by 18% year-over-year and 4% quarter-over-quarter.
The company’s stock is also beginning to rebound following a sluggish start to 2022. It lost about one-third of its value between January and April but has since been trending higher.
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