Wisetech acquires Swiss logistics solutions provider for $15.5m
Written on the 8 January 2020 by Business News Australia
Acquisitive Australian logistics solutions company WiseTech (ASX: WTC) is kicking off 2020 much like it ended 2019, with the purchase of Switzerland's SISA Studio Informatica for $15.5 million plus a multi-year earn-out of up to $8.9 million.
WiseTech's detractors including short seller J Capital and "creative accounting" investigator Bucephalus Research have previously alleged the group went on a $400 million acquisition spending spree since IPO to essentially buy growth.
WiseTech founder and CEO Richard White has hit back at these kinds of claims but his defence has done little to prevent a decline in the share price, which has fallen from highs around $38 in September and fell a further 4.3 per cent this morning to reach $22.90 at noon.
White is optimistic about the Lugano-based Swiss market leader's potential for the WiseTech network, with specialities in customs clearance, freight forwarding and bonded warehouse management.
"For over 40 years, SISA has accumulated a powerful breadth and depth of expertise across the customs and logistics landscape in Switzerland that will enhance our global customs and localisation capability, and further strengthen our solutions for logistics providers throughout Europe," says White.
"With Switzerland the ninth largest economy by GDP in Europe, the third largest trading partner with the EU for exports of goods and the fourth largest trading partner with the EU for imports of goods, bringing SISA into the WiseTech group now, consolidates our considerable geographic foothold in customs clearance and border compliance.
"Combined with our relentless investment in innovation and expansion of our CargoWise platform, together we will continue to provide solutions to our customers that will enable greater control over international compliance and achieve lower-risk cross-border execution in the changing European and global trade landscape."
The move follows the purchase of South Korean customs solutions provider Ready Korea in December for $13.2 million with an earn-out of up to $7 million.
Ready Korea however is a much more profitable company in the most recent accounts given, with adjusted revenue and EBITDA of $7.3 million and $1.6 million respectively in the 2018 calendar year.
In contrast, SISA's annual revenue in 2018 was $12.4 million and its EBITDA was around $500,000.
SISA is expected to be consolidated into WiseTech Global accounts from February 2020. The Swiss group will remain under the leadership of its managing director Ronald Schumacher with plans to deliver CargoWise One to customers over time.Never miss a news update, subscribe here. Follow us on Facebook, LinkedIn, Instagram and Twitter.
Business News Australia
Author: Business News Australia