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Acquisition Places Descartes Before E-Transport

Written By: Steve McVey
Published On: March 17 2000

Acquisition Places Descartes Before E-Transport
S. McVey - March 17th, 2000

Event Summary

Descartes Systems Group announced a definitive agreement to purchase E-Transport, Inc., a logistics exchange solution provider based in Pittsburgh, PA. Descartes plans to offer $80 million (USD) in stock to the privately-held E-Transport.

E-Transport's Marketplace is an online B2B transportation marketplace for shippers, carriers, and intermediaries, described as "a neutral switching station" where trading partners from around the world can conduct business, but still use their preferred data format and transmission means.

Market Impact

Descartes is making a strong play for the B2B and B2C transportation software markets, emphasizing hosted application delivery over traditional licenses and targeting both nascent Internet companies as well as brick and mortar veterans with Internet aspirations. Its determination is evidenced by seven acquisitions in the last three years. At $80 million, E-Transport will cost Descartes more than the other six combined (see Table).

Descartes stock price has soared in recent months, enabling it to make acquisitions. The key win for Descartes is E-Transport's multi-modal logistics capabilities, which gives it an edge over other trading exchanges for logistics providers. The move will help Descartes realize its goal to provide users global visibility to all segments of their transportation networks.

The great potential of the global logistics market has not gone unnoticed by SCM market leader i2 Technologies who recently announced FreightMatrix, the latest incarnation of its TradeMatrix marketplace exchange. i2's entry into this space could spell trouble for Descartes, though it will be some time before FreightMatrix offers international trade logistics and multi-modal functionality.

User Recommendations

Descartes has a considerable installed base in the beverage distribution and home delivery industries, which benefit from its short time horizon scheduling capabilities. Users in these industries or those in perishable goods delivery should place Descartes on their shortlists, especially when hosted applications are desired.

Descartes offers a DeliveryNet solution for logistics providers, but it is not clear how this and the other modules will work together with the trading exchange capability acquired from E-Transport. Users would do well to avoid making a quick decision for Descartes and seek details of the planned integration.

Company Name
Acquisition Cost
Date
Business
Michael Mead & Associates, Inc. $13.2 million 2/97 Distribution software for bakery and other food industries
Roadshow International, Inc. $29.9 million 11/97 Dynamic vehicle routing and scheduling software
DXDT Technologies, Inc. n/a 2/98 Logistics management software
Lightstone Group Inc. $11.4 million 6/98 Route optimization and scheduling for field personnel and delivery vehicles
Calixon NV $7.4 million 6/98 Trading partner collaboration, order tracking software
NRM Systems, Inc. $1.4 million 7/98 Warehouse optimization software and consulting
E-Transport, Inc. $80 million 2/00* Multimodal global logistics exchange solutions
* sale pending

 

 
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