Types of business we acquire
With a 30-year track record of strong organic growth, acquisitions add to our speed of execution and improve the functionality of our flagship product, CargoWise.
The two main categories of businesses we acquire are:
Foothold businesses
- Businesses that offer solutions in a particular geography/region, most commonly in the area of customs and border compliance.
- Local teams, language, relationships and knowledge of authorities are valuable where we do not already have these in our business.
Adjacency businesses
Adjacent businesses provide a new capability or area of expertise, or expand on those we already have. They fall into two categories:
- Tuck-ins: smaller businesses or teams that align with our existing team structures and deliver new product offerings to our existing customer base.
- Strategically significant: larger businesses with more complex integration efforts that may continue to operate and grow on their own but with WiseTech guidance.
Create deep value for existing customers.
Attract new customers in our existing markets.
Increase the total addressable market that we serve.
Enter new markets.
Enhance our ability to gain further access to customers and opportunities in new markets.
We invest in businesses that accelerate our product areas
Our acquisition strategy focuses on enabling our CargoWise development priorities.
We primarily invest in businesses that have technology solutions that accelerate these product areas.
Neo
Global integrated platform for Beneficial Cargo Owners to plan, book, track and manage their freight.
Digital documents
Digital documents and straight-through processing of data.
Customs and compliance
Customs and compliance procedures (including import/export) targeting ~90% of global manufactured trade flows.
At the heart of what we are looking for is the domain expertise and intellectual capital that the acquired business’ team bring to WiseTech. As well as active customers using the technology – proof that the solution is valuable to the industry and works effectively.
Watch our latest Investor Day Panel to learn more about our acquisition strategy.
Business characteristics
When looking at businesses to acquire, we look at whether they have:
A new product area
With functionality that overlaps with our existing customer base, or their customers.
Familiar product areas
A product area we are familiar with but would like to expand or enhance.
Geography/ other niche capability
With complexity that could take years to develop ourselves without specific, local knowledge.
Technical capability
New or enhanced capabilities we may be able to use across product areas.
What makes a business ideal to acquire?
Theses attributes provide a guide for the types of businesses we look for. The more attributes a business displays the more compelling the opportunity presents.
As a product-led business we buy businesses that strengthen our capabilities.
Possess the capability or functionality that will help us better meet the broad needs of our customers. For example, by leveraging the other party's network of logistics industry participants, including customers, network operators, carriers, regulatory bodies, and certifying agencies.
Typically, founder-led businesses have more leadership, drive, cohesion and product focus. We seek founders who share our vision and want to elevate their business with WiseTech’s support as part of a larger global business. If founders choose to step down, we take an open and transparent approach to plan the transition effectively.
We value depth and breadth in capabilities, product, and market knowledge.
One of WiseTech’s mantras is “culture eats strategy for lunch”. While we don’t expect other businesses to be identical, those genuinely aligned with us integrate more smoothly. A strong culture is shown by committed senior leaders, especially in product, leading to good tenure and low attrition. Cultural fit is crucial for effective integration.
We build products that enable and empower our customers and bring them value. When we look for additional product expertise it needs to benefit our customer base, or their customers.
Our preference is to buy businesses that have grown organically. We typically avoid acquiring businesses that have expanded through acquisition and are not fully integrated across their product and operations.
Generally, when a business is profitable or breakeven this is a reasonable indicator that the solution they provide is valuable and scalable long term.
We believe in investment in product over sales and we take a long-term view (‘Slower today, faster forever’) on our investments to ensure they make valuable long-term returns. As a result, our strategic goals often do not align with businesses where the investment horizons are shorter.
Our due diligence process means we look at a range of financial metrics and performance measures, including:
- Recurring revenue - % of total and growth
- Low level of services – such as implementation work or modifications
- Low/no hardware sales
- Little or no customization - CargoWise is a standard, modular product which can be configured but is not customized; every customer has access to the same functionality
- High investment in product and lower level of sales/marketing spend
- Organic growth
- Low customer attrition – focus on attrition vs net retention
Acquire outright
Our most common form of investment.
Investment
Providing support to businesses to help them scale and achieve their growth objectives with a view to purchasing outright in the future.
Partner and/or form commercial arrangement
Normal commercial arrangements or partnerships which provide mutual interest.
Organic
We are always growing our own teams and can and will deploy them to build solutions which we have the domain expertise to develop effectively.
- Timetable – selling a business is often challenging for sellers, especially founders. The business needs to continue operations during this time, so we need to set realistic and achievable timetables, not overly optimistic stretch goals.
- Advisors – having constructive and experienced advisors, ensures a smoother process and can save significant time and effort throughout the deal process.
- Financial projections – with over 30 years of experience, we know scaling businesses is hard. Most businesses we see are at the bottom of a J-curve in their financial projections, and very few meet these optimistic forecasts. We prefer to discuss realistic challenges rather than optimistic, sale-driven forecast results.
- We apply DCF valuation methods and comparable multiple approaches.
- We base our comparisons on our own deals and understanding of the individual circumstances.
- While we monitor global listed company multiples, most of our transactions involve smaller, unlisted businesses that have not yet achieved scale and are typically not comparable to publicly listed software companies.
- In-house due diligence where possible.
- Focus areas: product, technology, IS security, and people and culture.
- Our due diligence approach is designed with integration in mind. We aim to use the findings from due diligence to accelerate integration without duplicating efforts for both acquisition and integration purposes.
- We use functional experts to undertake our due diligence. External experts are used where required, often to leverage local knowledge.
- We aim to agree on key items and terms upfront.
- Risks are shared with risks from the past assigned to Sellers, and future risks to WiseTech.
- Earn-outs provide a valuable way to structure transactions.
- We focus on product related earn-outs that align with our strategic goals.
- We favor action-oriented earn-outs over outcome-oriented ones, as they align to our proven ways of working. Our approach, refined over 30+ years of successfully scaling acquired businesses, is designed to drive success effectively.
- Earn-outs deliver value and are designed to be achieved and not forfeited.
One of our core company mantras is ‘win-win or no deal’ and it permeates our approach to everything we do. Acquisitions are a two-way process, so it’s important that each party involved is benefitting.
What does this mean?
- Valuation: we’re happy to pay a premium for businesses that deliver true value through:
- unique domain expertise and intellectual capital.
- close alignment to our ways or working, customer base, technology stack, vision and culture. This makes the integration process and value creation quicker and more effective.
- higher earn-outs that are tied to valuable initiatives which means Sellers share some of the risk and reward.
- Equity: we’re prepared to include equity as part of the transaction consideration, allowing sellers to benefit from potential share price increases.
- Remuneration equity for staff: As part of the integration process, we align staff with our local employment terms and conditions and include remuneration equity where applicable.
- Team growth opportunities: Being part of a larger organization can provide teams in acquired businesses with career growth opportunities that were not previously available. This can involve expanding their roles from local to global and collaborating with a more diverse group of colleagues
Recent acquisitions
Join the WiseTech Global Group
WiseTech Global is a growing, highly profitable and cash generative business with access to funding to support growth through acquisitions that align with our business strategy.
Our approach to acquisitions is flexible, with deal structure and investment type closely aligned with our strategic priorities.
With a strong track record in successful acquisitions and integrations around the world, we will continue to invest in businesses where we see value and close product and strategic alignment.
If you have a business you think may be of interest to WiseTech, we’d like to hear about it. Please fill out and submit the form below.
The more information you can share the easier it is for our team to assess an opportunity. However, please only disclose information you are comfortable with and authorized to share. Do not disclose non-public information that is commercially sensitive.