Supply chain software firm Descartes acquires GroundCloud for $138M

CLOUD

Logistics and supply chain software-as-a-service company Descartes Systems Group Inc. said today it has acquired GroundCloud, the creator of a cloud-hosted final-mile automation platform, for $138 million.

Founded in 1981, Descartes is one of the oldest enterprise software firms on the block. It sells a suite of software products aimed at managing logistics and supply chains. With its software, companies can monitor and manage logistics processes such as delivery resources, invoices, documentation and shipments more efficiently.

The company targets transportation providers, logistics companies and distribution-intensive enterprises, and counts clients including Air Canada, The Emirates Group, The Home Depot Inc. and United Parcel Service of America Inc.

By acquiring GroundCloud, which was officially known as Windigo Logistics Inc., Descartes is aiming to improve its final-mile delivery capabilities, putting worker and community safety at the forefront of its efforts.

GroundCloud’s cloud-hosted software platform is said to combine operations, safety and compliance, and is used by final-mile carriers to receive customer delivery orders and plan and execute routes based on those orders. It also helps with training and monitoring delivery drivers in safety and performance, managing assets and resources, and analyzing the efficiency of logistics operations. In addition, as part of its mandate to improve safety, GroundCloud’s platform also incorporates video telematics for driving event detection and verification, enabling companies to leverage the insights it generates to inform reactive training programs.

Descartes Chief Commercial Officer Andrew Roszko said the company acquired GroundCloud because final-mile carriers need to take a more holistic approach to operations, safety and compliance. “This challenge is even more complex for the thousands of subcontracted delivery service providers working as agents for larger carriers,” he said. “GroundCloud helps ensure seamless operations, end-to-end visibility, and standards of safety and compliance are met, including helping final-mile carriers comply with the various safety mandates of large transportation brands.”

“When combined with Descartes, we see a tremendous opportunity to leverage GroundCloud’s safety content and compliance solutions across a wider set of industry verticals in our routing and mobile customer base,” added Descartes Chief Executive Edward Ryan.

Descartes said it used cash on hand to finance the $180 million acquisition. However, the final price could increase by a maximum of $80 million under a performance-based consideration that’s based on achieving certain revenue targets in each of the first two years post-acquisition.

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