More acquisitions likely on deck for Descartes, says Mackie’s Voci

Expect more acquisitions in the near term from Descartes Systems Group (TSX:DSG), says Mackie Research Capital analyst Massimo Voci.

On Tuesday, Descartes announced the $6.6-million acquisition of Computer Management USA, an American provider of security filing solutions and air cargo management solutions for airlines and their partners.

“We’re pleased to welcome Computer Management and its customers to the Descartes community,” said CEO Edward Ryan. “Computer Management customers will now have access to a wider geographic range of customs filing solutions and additional value-added services for the air industry that leverage our Global Logistics Network, such as eFreight and Cargo2000. We look forward to combining forces to broaden the capabilities and reach of our joint solutions, which help improve the efficiency and security of the air cargo industry.”

Voci says this acquisition is a minor one, but notes that Descartes’ management recently commented on the health of its acquisition pipeline. Noting the strength of the company’s balance sheet, the Mackie Research Capital analyst says he would not be surprised to see more acquisitions happen soon.

The adjustments Voci has made to his expectations for Descartes in light of the Computer Management pickup are modest, he says. In a research update to clients yesterday, he maintained his “Buy” rating and $18.00 one-year target on the stock.

Voci says the logistics market remains highly fragmented, and opportunistic acquisitions will continue to supplement Descartes’ organic growth.

At press time, shares of Descartes Systems Group on the TSX were up 3.7% to $16.10.

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