WiseTech announces acquisition of e2Open for $2.1 billion, in a major logistics technology deal

A significant logistics technology-related deal was struck over the weekend, with Sydney, Australia-based WiseTech Global, a provider of logistics software, including CargoWise, its logistics execution platform, acquiring E2open Parent Holdings Inc., parent company of Austin, Texas-based e2open, a network-based provider of cloud-based, mission-critical, end-to-end supply chain management platform services.

WiseTech said that the purchase agreement was $3.30 per share in cash, for a total of $2.1 billion. The company added that bringing e2open into the fold helps it strategically on various fronts, like adding adjacent markets, customer bases, and product capabilities, enabling WiseTech to “create a global, multi-sided, trade, and logistics marketplace.”

Established in 2000, e2open has operations in more than 20 countries, focusing on providing what WiseTech called a connected supply chain platform enabling companies to transform the way they make, move, and sell goods and services. The company’s platform connects more than 500,000 manufacturing, logistics, channel, and distribution partners together as a single multi-enterprise network that tracks more than 18 billion transactions annually.  

What’s more, WiseTech highlighted various benefits of this acquisition, including:

• evolving WiseTech’s vision to be the operating system for global trade and logistics;
• adding a strong complementary product suite that extends the CargoWise ecosystem, especially in adjacent areas of domestic logistics, carrier integration, global trade and supply chain management, benefitting customers and end consumers, creates cost efficiency and expands online connectivity between customer groups;
• accelerating and deepening WiseTech’s plans to create a multi-sided marketplace connecting asset-based carriers, logistics providers, importers, exporters, shippers and many other logistics and supply chain participants;
• expanding WiseTech’s total addressable market (TAM), and global reach and product offerings and driving WiseTech’s growth in adjacent markets through experienced teams and deep industry expertise, accelerating innovative solutions in trade and logistics;
• expanding WiseTech’s customer base with a network of 500,000 connected enterprises in adjacent markets including connectivity to major ocean carriers, ~5,600 customers and 250+ blue-chip customers; and
• the deal being supply chain, global trade management and direct importer, exporter, shipper centric, with little overlap between the WiseTech and e2open’s largely complementary customers, products and markets, among others

On a Sunday, May 25 company-hosted Webcast, Andrew Cartledge, WiseTech Interim CEO, described this deal as a key step for WiseTech and its future growth, stating that adding e2Open creates a key change in global scale and reach for WiseTech, adding adjacent markets, customer bases and product capabilities which allow WiseTech to create a global, multi sided trade and logistics marketplace.

“This transaction evolves WiseTech’s vision to be the operating system for global trade and logistics, [and] e2Open will add a strong complementary product suite that extends the ecosystem, especially in adjacent areas of domestic logistics, carrier integration, global trade, and supply chain management, all of which benefit customers and creates cost efficiency and online connectivity between customer groups,” said Cartledge.

And he also noted that this deal with help to accelerate and deepen WiseTech’s plans to create a multi-sided marketplace, connecting asset-based carriers, logistics providers, importers, exporters, and shippers.

“Together with e2Open, we’re taking a significant step extending into the entire global supply chain,” he said. “The acquisition of e2Open aligns with our three-piece strategy of product, penetration, and profitability, underpinned by an exceptional team of people. This presents a strategically significant opportunity to acquire a scaled and profitable leading provider that enables significant value creation, not only for WiseTech and our customers, but also our customers’ customers. It opens customers and a wider marketplace. It expands our ecosystem, bringing a network of 500,000 connected enterprises, including domestic and international carriers, logistics service providers, importers, exporters and shippers. This, in turn, also expands our TAM (total addressable market).”

Cartledge also drove home the size and scale of this acquisition on various fronts, while also observing that it is gaining a very deep expertise in adjacent areas of logistics and supply chain that extend WiseTech’s skill set. He explained there is little overlap in the companies’ products, with this acquisition representing an opportunity to accelerate team growth and drive its product and development engine.

To that end, he said that over the past 10 years, WiseTech has made 55 acquisitions, which have extended its product capability technology lead with more than 50 applications, as well as expanded a market penetration across 25 countries and now have a total of 16,500 customers, which WiseTech has acquired for roughly $12 billion. And, by comparison, with this single acquisition of e2Open, comes five product groups constructed of more than 30 product capabilities, around 5,600 customers, 500,000 connected enterprises across 20 countries for $2.1 billion. He called this acquisition an opportunity that extends into different areas of logistics, while accelerating WiseTech’s move into the global supply chain, while complementing and enhancing its technology capability across a broadened product suite in a single transaction.

On the Webcast, Richard White, WiseTech Founder, Executive Chair, & Chief Innovation Officer, said that this acquisition represents a significant step in the company’s goal of enabling and empowering global logistics, coupled with taking early steps to move supply chains of the world by connecting its customers with their customers.

“Today, we take a huge step forward towards that goal,” he said. “Since its founding, e2Open has methodically expanded its ecosystem through strategic, organic growth and acquisitions. This ecosystem includes major ocean carriers, direct exporters, direct importers and shippers. Around half of the world's international trade passes through logistics service providers like freight forwarders, through WiseTech’s core customer base, while the other half is from exporters and importers dealing directly with major shipping lines. It is important to remember, around 90% of the world's international trade has a sea freight component. You can see that e2Open’s interconnected ecosystem, traps around 67 million containers annually, handles 31 million invoices and manages 109 million orders. Additionally, around 18.5% of global export container bookings are managed through e2open’s platforms. This ecosystem is driven e2Open’s suite of products, primarily around global trade, supply planning, and channel and trade compliance. These capabilities, the investment in product development and people, extends our CargoWise ecosystem into adjacent markets and capabilities.

And by connecting our customer groups with their customers and suppliers via e2Open’s platforms, we will drive further productivity and capability across our expanded product portfolio and further enhance the value chain. These product opportunities extend our reach in key adjacent markets such as global trade management and supply chain planning, while filling in gaps in our own products that would have required substantial investment over time. These extended capabilities will be attractive to existing and new customers alike, and allow our combined customer base access to new and expanded capabilities and new geographies and markets.”  

In a LinkedIn post, Philip Damas, managing director and head of Drewry Supply Chain Advisors, noted how e2open acquired INTTRA and Amber Road in recent years but could not turn its acquisitions into a profitable integrated business.

“WiseTech, which is listed on the stock market, is seen as a very strong provider of software to international forwarders,” he wrote. “It will be interesting to see if it can turn the former e2open business around and integrate it into its software offerings. e2open was also trading on the stock market and eventually heeded the financial discipline of its stockholders and got sold. But there are still many logistics tech ‘zombies’—company startups still not making money after more than 10 years of trading—following the surge of private equity investments in logistics tech in the 2010s.”