Descartes Systems Group (NASDAQ: DSGX) has completed its acquisition of Management Systems Resources according to a Descartes press release. The acquisition will help Descartes customers better navigate international customs.
Descartes, based in Waterloo, Ontario, Canada, is a global provider of on-demand software that assists businesses in logistical operations. It uses a cloud-based messaging system known as the Global Logistics Network (GLN). Cantech Letter said that GLN connects over 13,000 supply chain participants, processes 4.5 billion messages and manages 30 million routes annually. According to Gartner Inc., Descartes is the sixth-largest supply chain software provider with revenue of $221 million in 2017.
Management Systems Resources, based in Toronto, helps companies meet compliance standards for exporting and importing products. The company has 2,000 customers, over 67,000 subscribers and operates in over 100 countries. Descartes will take control of Management Systems Resources’ three businesses – Visual Compliance, eCustoms and MSR. The three businesses are collectively known as Visual Compliance.
“Trade compliance is a critical issue for our GLN customers. This is especially so in the current environment where trade agreements are being re-negotiated, tariffs and duties are changing at a rapid pace, and sanctions on restricted or denied parties are being increasingly enforced,” said Descartes chief executive officer Edward J. Ryan. “We’ve had tremendous historical success in combining with higher-margin trade data content businesses, like Visual Compliance, to help our partners and customers better manage the increasing complexities of international trade. We’re very excited to add Visual Compliance to the Global Logistics Network and further strengthen the value we can bring to our customers and partners.”
According to the press release, the acquisition purchase price was CAD 330 million or roughly $249 million. (All currency values will be represented in U.S. dollars.) The acquisition was satisfied by Descartes Systems Group issuing nearly 300,000 common shares valued at roughly $9 million to individuals receiving proceeds from the transaction. The remaining $240 million was satisfied by cash drawn from Descartes credit facility.