Descartes acquires IES, Versant’s Tom Liston Raises Target

Another acquisition for the suddenly active on the M&A front Descartes Systems Group (TSX:DSG) today.

After last week’s relatively minor pickup of Infodis, a Netherlands-based provider of transportation management software, Descartes this morning announced it would acquire Integrated Export Systems, Ltd. and IES Asia Limited for approximately (US) $35-million in cash.

Descartes says the move will improve the scope of its commercial transactions processed, strengthen its broker applications footprint, and add to its presence in the Asia Pacific region.

Versant Partners analyst Tom Liston says this acquisition is “highly strategic” as it extends Descartes application footprint to non-vessel operating common carriers and custom brokers. He also believes it is a low risk move because IES’ revenue is recurring and Descartes is intimately familiar with the company, having worked with it for more than six years. In a research update to clients today, Liston maintained his BUY recommendation and increased his twelve-month target to $11.50, from his previous $11.25.

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IES, Ltd. which was founded in 1989 and is headquartered in Midland Park, New Jersey is a provider of supply chain, logistics and compliance management software. The company has approximately six-hundred customers in more than seventy countries worldwide.

Liston says Descartes, which is a top pick of Versant Partners, is gaining significant momentum of late. The Versant analyst points to the company’s recent Q1, 2013 results, that beat expectations, and the recent customer win of Brinks, which was the largest in Descartes thirty year history.

Share of Descartes on the TSX closed today up 3% to $8.46.

Related: Cantor Fitzgerald’s Tom Liston shares his top Canadian tech picks for 2013

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