Waterloo, Ontario-based Descartes, a provider of logistics based on-demand, software-as-a-service offerings, recently announced it acquired Tucson, Ariz.-based NetCHB, a provider of customs filing services in the U.S.
The purchase price was $40 million, with Descartes noting that the maximum amount payable under the all-cash performance-based earn-out is $60.0 million.
NetCHB’s service offerings helps customers streamline and automate customs filing processes and the declaration process for high volumes of e-commerce shipments in the U.S., according to a Descartes spokesperson. And the company’s cloud-based platform is used by more than 700 customs brokers to connect to the U.S. Customs and Border Protection (CPB) Automated Broker Interface (ABI) in order to electronically execute both fiscal customs declarations and security filings, including the complex Section 321 Type 86 compliance that helps streamline border crossing.
The company has also leveraged its success with traditional customs filings to capitalize on changes in the regulatory filing framework for Section 321 Type 86 ecommerce shipments (a voluntary filing initiative for low-value ecommerce goods that CBP introduced in 2019 to streamline border crossing), according to Descartes.
“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, in a statement. “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.”
Chris Jones, EVP Industry & Services, Descartes, told LM that part of Descartes growth strategy is through acquisition.
“We are always looking for high quality companies in related businesses to become part of the company,” he said. “NetCHB is a company that is working in the same cross-border e-commerce customs filing space as Descartes. The owners were looking for someone who had similar interests as they did and wanted to see their efforts move forward and customers protected as part of a larger organization. Descartes has a long history of this type of acquisition.”
What’s more Jones explained that Descartes’ ability to provide a high degree of service to its customers comes from the deep domain expertise that it embeds in its solutions.
“In the case of NetCHB, it extends our knowledge of customs regulations, automated filing requirements and the ability to deliver solutions that can scale to high volume processing requirements of cross-border e-commerce,” he said. “NetCHB increases our scale in the customs filing market. We are always looking at increasing the critical mass of our business in the markets we operate to better serve our customers and those of the acquired company.”
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