Proving the Business Case for the Internet of Things

Descartes acquires MacroPoint for $110m

Steve Rogerson
August 29, 2017
 
Canadian logistics software-as-a-service company Descartes Systems Group has acquired MacroPoint, a US electronic transportation network providing location-based lorry tracking and predictive freight capacity data, for around $110m.
 
“Consumers expect to see the location and progress of shipments from the point of order to delivery,” said Ken Wood, EVP of product management at Descartes. “With leading e-commerce retailers and other shippers demanding that their transportation providers provide real-time location-based information, the business-to-business market now has the same expectation of full visibility into transportation moves. To meet this expectation, MacroPoint has established what we believe is the preeminent network of connected vehicles and location-based content in North America.”
 
MacroPoint runs a connected network of over two million trucking assets and drivers. It connects to lorries through integrations to on-board electronic logging devices (ELDs), transportation management systems, GPS-enabled smart phone applications and location-based mobile phone triangulation.
 
MacroPoint uses these data to help transportation brokers, logistics service providers and shippers track the locations of deliveries in lorries. The Ohio-based company can also use this content to provide transportation brokers and shippers with predictive freight capacity to help identify early opportunities for additional freight moves.
 
“MacroPoint is the market leader for truckload shipment visibility,” said Bennett Adelson, CEO of MacroPoint. “We believe that the combination of Descartes’ global logistics network with our cloud-based, real-time load visibility platform creates a truly differentiated offering that helps customers research, plan, execute and monitor multi-modal shipments around the world.”
 
Descartes acquired MacroPoint on a tax-efficient basis for approximately $US110m satisfied with approximately $90m in cash and $20m in shares. The cash consideration was satisfied from $10m of cash on hand and the balance from Descartes’ existing acquisition line of credit. The share consideration is subject to a 12 month hold period, with half of the share consideration required to be held for at least 18 months.
 
“Descartes has a successful history of electronically connecting transportation providers to transportation brokers, logistics intermediaries and shippers to share data, automate processes and run more efficiently,” said Edward Ryan, Descartes CEO. “With this experience, we appreciate the unique value of a network-based business focused on the transportation industry with a track record of high revenue growth, high recurring revenues and profitability. We’re excited to have MacroPoint join the global logistics network so that we can jointly deliver even more value to the logistics and supply chain community.”
 
MacroPoint is headquartered in Cleveland, Ohio, and connects more than 8000 transportation providers, brokers and shippers. At the time of acquisition, MacroPoint had annualised revenues of approximately $12.5m.
 
“We view Descartes as a natural fit for the MacroPoint network and business,” said Amir Goldman of Susquehanna Growth Equity, a MacroPoint shareholder. “We believe there are tremendous opportunities for the combined business, which is why we’ve become Descartes shareholders as part of this transaction.”
 
Descartes is scheduled to report its second quarter fiscal financial results after market close on September 6, 2017.
 
Descartes provides on-demand, software-as-a-service focused on improving the productivity, performance and security of logistics-intensive businesses. Customers use its modular, software-as-a-service to route, schedule, track and measure delivery resources; plan, allocate and execute shipments; rate, audit and pay transportation invoices; access global trade data; file customs and security documents for imports and exports; and complete numerous other logistics processes. Its headquarters are in Waterloo, Ontario, Canada, and it has offices and partners around the world.