News / $2.1bn E2open purchase will 'catapult WiseTech into a different dimension'

Australian supply chain software provider WiseTech Global, owner of the CargoWise platform, has agreed to purchase US peer E2open in a $2.1bn deal.

The acquisition is by far the largest by WiseTech, which has grown over the years through a series of bolt-on purchases, so the addition of E2open would represent a step-change in its growth story, as Loadstar Premium editor Alessandro Pasetti noted today.

“To be sure, E2open catapults [WiseTech founder] Richard White’s baby into a totally different dimension, nearly doubling the size of its $700m baseline revenue and workforce alike,” he writes.

Mr White (pictured above) said e2open’s services and customers set would be complementary to WiseTech, and would “extend the CargoWise ecosystem, especially in adjacent areas of domestic logistics, carrier integration, global trade, and supply chain management”.

“E2open brings to WiseTech several well established complementary products,” he 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,” he explained.

“It also expands WiseTech’s customer base, adding a network of 500,000 connected enterprises, including major connectivity with ocean carriers and numerous blue-chip shippers,” the company said, alluding to E2open’s ownership of container booking platform INTTRA, which continues to account for around 25% of all container shipment bookings made globally, according to some estimates.

E2open was listed on the New York Stock Exchange in February 2021, one of the last under a SPAC arrangement, at an initial price of $15 per share.

However, it then suffered two years of disappointing returns, which led to the exit of CEO Michael Farlekas, in October 2023, as its share price continued to fall.

At the beginning of this month, it was trading at just $1.97 per share, and the WiseTech offer of $3.30 per share represents a 68% premium on its current value.

WiseTech said completion of the deal was expected by the end of the year, as “E2open shareholders representing more than 50% of the outstanding voting shares have already provided written consent approving the merger, such that no further E2open shareholder approval is required”.

The Australian company added that it had raised $3bn through a syndicated debt facility to finance the deal, which would raise its leverage from essentially nothing today, to 3.5 times its 2025 full-year ebitda.

It said it expected this to be reduced to below 2x ebitda “within three years of completion, supported by strong existing cash flow generation, continued revenue and earnings growth and synergy realisation”.