WiseTech shares lift on $3.3b acquisition of e2open
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More news: WiseTech Global shares climbed after it announced plans to acquire US-based supply chain platform provider e2open for US$2.1 billion ($3.25 billion), which will be fully funded through a new debt facility.
The logistics software company’s share price was up 6% to $106.5 at 10:53am AEST.
E&P analyst Paul Mason was positive on the announcement and had a $139 valuation on WiseTech while RBC Capital Markets analysts had an 'outperform' rating on the stock with a price target of $110.
The analysts are largely positive about the deal given markets have had about four weeks to consider the deal since WiseTech first confirmed that it was in the works.
What they said: “The market had a fair bit of time to digest the idea of Wisetech acquiring E2Open, we understand that it was a well-discussed topic at Macquarie Conference earlier in the month, and has been something that we have talked to investors about directly. As such we believe the market has likely already got it’s head around the strategic rationale and the pricing,” Mason said.
RBC analyst Garry Sherriff said: "Market should be generally positive on the proposed transaction from a strategic perspective and WTC expects it to be EPS accretive in year 1 pre-synergies, ex M&A/integration costs".
WiseTech acquires US-based e2open for $3.3b
The news: Logistics software giant WiseTech Global has announced it will acquire US-based supply chain software platform e2open for USD2.1 billion ($3.25 billion).
The numbers: WiseTech plans to acquire the software platform for USD3.30 ($5.11) a share. The deal is comprised of USD1.2 billion ($1.86 billion) in cash consideration to Emerald shareholders, gross debt of USD1.1 billion ($1.7 billion) and USD0.2 billion ($0.31 billion) in cash.
E2open shareholders representing more than 50% of voting share have already consented to the deal, which is expected to be complete in 1H26 pending customary conditions and regulatory approval.
A new debt facility of USD3 billion ($4.65 billion) will underwrite the acquisition price, transaction costs and working capital requirements.
The syndicated debt facility — loaned by six existing domestic and international banks alongside three new lenders — will have multiple tranches with staggered maturities of up to five years.
At transaction close WiseTech expects a pro forma net leverage ratio of about 3.5 times FY25 EBIDTA but says it has a clear pathway to reduce net leverage to less than two times that figure within three years of completion.
The transaction is expected to be earnings-per-share accretive in year one before accounting for business synergies.
The context: WiseTech’s financial advisors on the acquisition are Bank of America, Barrenjoey/Barclays and Macquarie, while its debt adviser is Gresham.
The acquisition will expand WiseTech’s total addressable market by adding 500,000 connected enterprises and about 5,600 customers, including more than 250 blue-chip customers. WiseTech said it has little overlap with e2open’s complementary customers, products and markets.
What they said: “E2open brings to WiseTech several well established complementary products,” WiseTech Global founder, executive chair, and chief innovation officer Richard White said.
“This will enable WiseTech to create a multi-sided marketplace that connects all trade and logistics stakeholders to efficiently offer and acquire services, removing complex disconnected processes and driving visibility, predictability and cost savings through the value chain.”
