Descartes Acquires NetCHB
February 10 2022 - 7:00AM
Descartes Systems Group (TSX:DSG) (Nasdaq:DSGX), the global leader
in uniting logistics-intensive businesses in commerce, announced
that it has acquired NetCHB, a leading provider of customs filing
solutions in the US.
NetCHB has been helping its customers streamline
and automate customs filing processes in the US for more than 15
years. The company’s cloud-based platform is used by more than 700
customs brokers to connect to the US Customs and Border Protection
(CBP) Automated Broker Interface (ABI) to electronically execute
both fiscal customs declarations and security filings. More
recently, the company has built on its success with traditional
customs filings to capitalize on changes in the regulatory filing
framework for Section 321 Type 86 ecommerce shipments. Section 321
Type 86 is a voluntary filing initiative for low-value ecommerce
goods that CBP introduced in 2019 to streamline border
crossing.
“Section 321 Type 86 compliance is complex, but
brokers and forwarders that take advantage of it can reduce the
amount of time ecommerce packages are waiting for customs release,”
said Ken Wood, EVP Product Management at Descartes. “NetCHB’s
platform automates the declaration process for high volumes of
ecommerce shipments and helps keep them moving quickly to
consumers, helping some of the largest ecommerce customs brokers
and forwarders process shipments in a compliant and efficient
manner.”
“As the digitization of the logistics and supply
chain industry picks up pace, we continue invest in complementary
solutions that add depth and breadth to our Global Logistics
Network (GLN),” said Edward J. Ryan, Descartes’ CEO. “NetCHB has a
team of deep customs domain experts, scalable and robust technology
solutions, and a large group of customers that will benefit from
additional solutions available on the GLN to help them manage the
lifecycle of shipments.”
NetCHB is headquartered in Arizona. Descartes
acquired NetCHB for up-front cash consideration of $40 million,
plus potential performance-based consideration. The maximum amount
payable under the all-cash performance-based earn-out is $60.0
million, based on NetCHB achieving revenue-based targets over the
first two years post-acquisition.
About Descartes Systems
GroupDescartes (Nasdaq:DSGX) (TSX:DSG) is the global
leader in providing on-demand, software-as-a-service solutions
focused on improving the productivity, performance and security of
logistics-intensive businesses. Customers use our modular,
software-as-a-service solutions to route, schedule, track and
measure delivery resources; plan, allocate and execute shipments;
rate, audit and pay transportation invoices; access global trade
data; file customs and security documents for imports and exports;
and complete numerous other logistics processes by participating in
the world's largest, collaborative multimodal logistics community.
Our headquarters are in Waterloo, Ontario, Canada and we have
offices and partners around the world. Learn more at
www.descartes.com.
Global Investor Contact Laurie McCauley
+1-519-746-6114 x202358investor@descartes.com
Cautionary Statement Regarding
Forward-Looking StatementsThis release contains
forward-looking information within the meaning of applicable
securities laws ("forward-looking statements") that relate to
Descartes' acquisition of NetCHB and its solution offerings; the
potential to provide customers with customs filing solutions; the
potential to combine NetCHB’s solution offerings with other
products and services of Descartes’; the level of demand for an
integrated solution; other potential benefits derived from the
acquisition and NetCHB’s solution offerings; and other matters.
Such forward-looking statements involve known and unknown risks,
uncertainties, assumptions and other factors that may cause the
actual results, performance or achievements to differ materially
from the anticipated results, performance or achievements or
developments expressed or implied by such forward-looking
statements. Such factors include, but are not limited to, the
expected future performance of the NetCHB business based on its
historical and projected performance as well as the factors and
assumptions discussed in the section entitled, "Certain Factors
That May Affect Future Results" in documents filed with the
Securities and Exchange Commission, the Ontario Securities
Commission and other securities commissions across Canada including
Descartes most recently filed management's discussion and analysis.
If any such risks actually occur, they could materially adversely
affect our business, financial condition or results of operations.
In that case, the trading price of our common shares could decline,
perhaps materially. Readers are cautioned not to place undue
reliance upon any such forward-looking statements, which speak only
as of the date made. Forward-looking statements are provided for
the purposes of providing information about management's current
expectations and plans relating to the future. Readers are
cautioned that such information may not be appropriate for other
purposes. We do not undertake or accept any obligation or
undertaking to release publicly any updates or revisions to any
forward-looking statements to reflect any change in our
expectations or any change in events, conditions or circumstances
on which any such statement is based, except as required by
law.
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