WATERLOO, Ontario - Descartes (NASDAQ:DSGX) Systems Group (TSX:DSG) (NASDAQ:DSGX), known for integrating logistics-intensive businesses in commerce, has completed the acquisition of Assure Assist, Inc., which operates as MyCarrierPortal (MCP), for an upfront payment of $24 million in cash. The deal, announced today, also includes potential performance-based consideration that could add up to $6 million, to be paid in fiscal years 2026 and 2027 if revenue targets are met.
MCP, a prominent US-based provider of carrier onboarding and risk monitoring solutions, enables freight brokers and shippers to efficiently screen and onboard truck carriers. The platform assesses carriers for compliance with insurance, safety, and legitimacy requirements, maintaining ongoing monitoring to ensure carriers continue to meet the broker's criteria. This process is crucial for mitigating carrier fraud and cargo theft, which are persistent issues in the transportation industry.
The acquisition is set to bolster Descartes' Know-Your-Carrier (KYC) capabilities, aiming to enhance supply chain performance and reduce fraud risks. Dan Cicerchi, General Manager of Transportation Management at Descartes, stated that this addition is in response to customer demand for more robust fraud prevention tools. The integration of MCP with Descartes' existing MacroPoint FraudGuard tool is expected to provide a comprehensive solution for customer needs in carrier vetting and compliance.
Descartes CEO Edward J. Ryan expressed enthusiasm about incorporating MCP's solutions into their Global Logistics Network (LON:NETW), which is designed to manage the complete lifecycle of shipments securely and efficiently. The company welcomes MCP's employees, customers, and partners into the Descartes family.
This strategic move is part of Descartes' ongoing efforts to expand its software-as-a-service offerings, which are aimed at improving productivity, security, and sustainability for logistics-intensive businesses. Descartes operates globally, with headquarters in Waterloo, Ontario, Canada, and has a network of offices and partners worldwide.
The information regarding this acquisition is based on a press release statement.
In other recent news, Descartes Systems Group reported a robust second quarter, surpassing its adjusted EBITDA growth targets. The company's total revenues increased by 14% to $163.4 million, and adjusted EBITDA rose by 17% to $70.6 million. These positive results were attributed to both organic growth and the contributions from recent acquisitions, including OCR, Thyme ASD, and BoxTop Technologies.
Despite larger earn-out payments impacting cash flow, Descartes maintained a solid financial position with over $250 million in cash and no debt. The company also ended the quarter with $350 million in available credit. Looking ahead, Descartes plans to continue its M&A strategy, focusing on profitable growth.
Other recent developments include anticipated capital expenditures of $2-3 million for the second half of FY 2025, and an acquisition of the remaining 5% of ASD business for $3.6 million planned for Q4. The company also expects an adjusted EBITDA growth target of 10-15% annually with an operating margin range of 40-45%. These developments illustrate Descartes Systems Group's resilience and strategic growth in a challenging market.
InvestingPro Insights
As Descartes Systems Group (NASDAQ:DSGX) announces the acquisition of MyCarrierPortal, it's worth noting the company's current financial health and market performance. Descartes boasts impressive gross profit margins, with recent data showing a gross profit of $461.3 million and a margin of 75.91% for the last twelve months as of Q2 2025. This robust margin underlines the company's efficiency in managing its cost of goods sold and hints at strong pricing power within its industry.
Investors should be aware that Descartes is currently trading at a high earnings multiple, with a P/E ratio of 66.57, which reflects a premium valuation in the market. This high multiple suggests that the market has high expectations for the company's future growth, but it also means that the stock's price is sensitive to any changes in those expectations. The P/E ratio adjusted for the last twelve months as of Q2 2025 stands at 58.64, which still indicates a valuation above the industry average.
Despite these high valuation metrics, Descartes' operational performance remains solid. The company's revenue growth for the last twelve months as of Q2 2025 was 15.4%, showcasing its ability to expand its top line. Moreover, with an InvestingPro Tip highlighting that the company's cash flows can sufficiently cover interest payments, investors can have confidence in Descartes' financial stability and its ability to service debt.
For those interested in further details on Descartes' financial outlook and stock performance, InvestingPro offers additional tips and insights. As of now, there are 17 more InvestingPro Tips available for Descartes Systems Group, which can be accessed at InvestingPro for those looking to dive deeper into the company's metrics and potential investment strategies.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.