Descartes Acquires ASD

Rhea-AI Summary

Descartes Systems Group (DSGX) acquires Aerospace Software Developments (ASD), a leading provider of customs and regulatory compliance solutions, for approximately €57 million. The acquisition strengthens Descartes' customs and regulatory compliance footprint, adding deep Irish customs domain expertise and modern multi-country customs technology platform. ASD's RFID solutions complement Descartes' CORE BLE real-time tracking platform, offering synergies for the airline community.

Positive

• Acquisition of ASD strengthens Descartes' customs and regulatory compliance footprint
• ASD adds deep Irish customs domain expertise and a modern multi-country customs technology platform
• Synergies between ASD's RFID solutions and Descartes' CORE BLE real-time tracking platform benefit the airline community
• Descartes paid approximately €57 million to acquire ASD

Negative

• None.

Insights

Financial Analyst

Descartes Systems Group's acquisition of Aerospace Software Developments consolidates their position within the customs and regulatory compliance sector, specifically expanding their European presence. The payment of €57 million is a strategic deployment of Descartes' cash reserves, potentially improving their earnings through synergy realization and cross-selling opportunities. Given Descartes' history of effectively integrating acquisitions, investors might anticipate an accretive effect on earnings per share over the medium to long term. Additionally, the transaction is not reliant on leverage, which maintains a healthier balance sheet and reduces financial risk.

Market Research Analyst

By acquiring ASD, Descartes not only expands its foothold in Ireland but also bolsters its customs and regulatory solutions, a niche area with growing importance due to increased global trade complexities. ASD's RFID technology complements Descartes’ existing portfolio, particularly its CORE BLE tracking platform, signalling potential for product enhancement and leadership in tracking solutions within the logistics sector. This could lead to increased market share and client acquisition. Investors should monitor the integration progress and customer retention rates post-acquisition as indicators of the deal’s success.

Tech Industry Analyst

This acquisition is notable for its emphasis on technology, with ASC's modern multi-country customs technology platform potentially offering Descartes a competitive edge in customs processing. In the context of the air logistics community, RFID solutions stand to revolutionize asset tracking, reducing manual labor and improving compliance. Considering the ongoing digitization of supply chains, Descartes' enhanced capabilities in these areas could lead to greater market demands for their services. For investors, there is an opportunity to gauge the company's innovative trajectory and the effectiveness of its R&D investments.

Strengthens Descartes’ Customs and Regulatory Compliance Footprint

WATERLOO, Ontario and ATLANTA, April 22, 2024 (GLOBE NEWSWIRE) -- Descartes Systems Group (TSX:DSG) (Nasdaq:DSGX), the global leader in uniting logistics-intensive businesses in commerce, announced that it has acquired Aerospace Software Developments (“ASD”), a leading provider of customs and regulatory compliance solutions.

Based in Ireland, ASD provides customs declaration software solutions for logistics services providers (“LSPs”) and shippers, as well as RFID solutions that help the air logistics community track assets. The company’s customs filing solutions, operating under the brand Thyme-IT, help importers, exporters, and LSPs comply with Irish regulatory requirements for imports and exports in a secure and efficient manner. In addition, ASD’s RFID solutions help global airlines and ground handlers eliminate manual tasks and comply with various airline regulations more efficiently through the unique identification, tagging, and tracking of assets.

“Descartes’ Global Logistics Network (“GLN”) was built to help shippers, carriers, and LSPs connect and collaborate to manage the complete lifecycle of shipments,” said Ken Wood, EVP Product Management at Descartes. “This combination with ASD is highly complementary to our current product footprint. ASD adds deep Irish customs domain expertise and a modern multi-country customs technology platform. We also see great synergies for the airline community by combining ASD’s RFID-based solutions with Descartes’ CORE BLE real-time tracking platform.”

“As customers increasingly look to cover more business processes with one provider, we continue to add solutions to the GLN for them to do so,” Edward J. Ryan, Descartes’ CEO. “ASD shares a common vision to serve the wider global logistics community of shippers, carriers and LSPs. We’re excited to welcome the ASD employees, customers and partners into the Descartes family.”

ASD is headquartered in Dublin, Ireland. Descartes arranged to acquire ASD for approximately €57 million ($US 61 million), with €54 million paid at closing from cash on hand and the final arrangements for the transaction expected to occur in Descartes’ fiscal 2025 fourth quarter.

About Descartes Systems Group           
Descartes is the global leader in providing on-demand, software-as-a-service solutions focused on improving the productivity, security, and sustainability of logistics-intensive businesses. Customers use our modular, software-as-a-service solutions to route, track and help improve the safety, performance and compliance of 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 by participating in the world's largest, collaborative multimodal logistics community. Our headquarters are in Waterloo, Ontario, Canada and we have offices and partners around the world. Learn more at www.descartes.com, and connect with us on LinkedIn and X (Twitter).

Descartes Investor Contact         
Laurie McCauley
(519) 746-6114 x202358
investor@descartes.com

Cautionary Statement Regarding Forward-Looking Statements

This release contains forward-looking information within the meaning of applicable securities laws ("forward-looking statements") that relate to Descartes' acquisition of ASD and its solution offerings; the potential to provide customers with customs filing and RFID-based asset tracking solutions; other potential benefits derived from the acquisition and ASD’s solution offerings; and other matters. Such forward-looking statements involve known and unknown risks, uncertainties, assumptions and other factors that may cause the actual results, performance or achievements to differ materially from the anticipated results, performance or achievements or developments expressed or implied by such forward-looking statements. Such factors include, but are not limited to, the expected future performance of the ASD business based on its historical and projected performance as well as the factors and assumptions discussed in the section entitled, "Certain Factors That May Affect Future Results" in documents filed with the Securities and Exchange Commission, the Ontario Securities Commission and other securities commissions across Canada including Descartes most recently filed management's discussion and analysis. If any such risks actually occur, they could materially adversely affect our business, financial condition or results of operations. In that case, the trading price of our common shares could decline, perhaps materially. Readers are cautioned not to place undue reliance upon any such forward-looking statements, which speak only as of the date made. Forward-looking statements are provided for the purposes of providing information about management's current expectations and plans relating to the future. Readers are cautioned that such information may not be appropriate for other purposes. We do not undertake or accept any obligation or undertaking to release publicly any updates or revisions to any forward-looking statements to reflect any change in our expectations or any change in events, conditions or circumstances on which any such statement is based, except as required by law.

 

FAQ

What did Descartes Systems Group acquire?

Descartes Systems Group acquired Aerospace Software Developments (ASD), a leading provider of customs and regulatory compliance solutions.

Where is ASD headquartered?

ASD is headquartered in Dublin, Ireland.

How much did Descartes pay to acquire ASD?

Descartes paid approximately €57 million ($US 61 million) to acquire ASD.

What solutions does ASD provide?

ASD provides customs declaration software solutions for logistics services providers and shippers, as well as RFID solutions for the air logistics community.

What are the benefits of the acquisition for Descartes?

The acquisition strengthens Descartes' customs and regulatory compliance footprint, adds deep Irish customs domain expertise, and offers synergies with ASD's RFID solutions for the airline community.