The WiseTech Global (ASX: WTC) share price is up after the technology company announced another acquisition.
WiseTech was founded in 1994 by Richard White to provide software to the logistics sector. Since then it has grown to become a global provider of logistics software, claiming to service 19 of the top 20 logistics companies globally. WiseTech makes money by charging its customers on a ‘per use’ basis rather than as a subscription model. Meaning, WiseTech directly benefits as its customers grow their businesses.
What Has WiseTech Acquired Now?
The logistics technology business announced that it has acquired South Korean business, Ready Korea. It provides customs, bonded warehouse and trade compliance solutions.
Ready Korea is headquartered in Seoul and it facilitates the lodgement of electronic transactions to the Korean Customs Service, including customs brokerage and refunds, and free trade agreements.
The South Korean business also provides a trade administration offering for generating and submitting electronic the import and export documentation.
Customers of Ready Korea include FedEx, Bayer Korea, Korea 3M Corporation, Samsung, Siemens, Johnson & Johnson as well as many others.
The acquisition price is $13.2 million upfront with a further multi-year earn out potential of up to $7 million relating to business and product integration, customs development, customer conversion and financial performance.
In the 2018 calendar year, it generated annual revenue of approximately $7.3 million and EBITDA (click here to learn what EBITDA means) of $1.6 million.
WiseTech Global Founder and CEO Richard White said: “As the 8th largest export market and 10th largest import market in the world, South Korea plays a key role in Asia’s, and the world’s, supply chains.
“Bringing Ready Korea’s regional customs and trade management expertise into the group now expands our innovation and development capabilities in this important region as we continue to build-out our global customers footprint.
“This is a further step in strengthening our international reach deeper across Asia and together we will develop even more productive and valuable cross-border logistics solutions for our regional and global customers.”
Ready Korea will remain under the leadership of Managing Director Tom Kim but will be integrated into WiseTech and shift to CargoWise over time.
WiseTech has been attacked by short sellers for its acquisition strategy, but it reminded investors that this meets its “clearly stated strategy of accelerating long term organic growth through targeted, valuable geographic foothold and technology adjacency acquisitions.”
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