WiseTech buys Chilean logistics provider as part of South American spending spree

Scandal-plagued WiseTech has acquired its fourth business in Latin America in as many months as founder Richard White reasserts his control of the company.

WiseTech, founded by Richard White, has made four acquisitions in Latin America in as many months.

Richard White has extended his Latin America spending spree, with WiseTech snapping up its second business in the region in four months.

The scandal-plagued logistics giant said on Tuesday it had deepened the global customs capability of its flagship CargoWise platform, acquiring Chilean-headquartered Editrade S.A. Financial terms were not fully disclosed. But the group ASX-listed tech giant will issue 66,478 new shares to part-fund the $US3.4m equity consideration value.

“We are excited to welcome Editrade to the WiseTech group as they bring such deep and trusted local expertise in customs compliance and processing across several Latin American markets: Chile, Ecuador, Panama and Mexico,” said WiseTech chief execution officer Vlad Bilanovsky.

“This foothold investment will become part of the CargoWise global customs solution, bringing us even closer to our target of covering 90 per cent of global manufactured trade flows, enabling large global freight forwarders to efficiently manage their end-to-end shipment process all within CargoWise.”

RBC Capital Market analyst Garry Sherriff has upgraded WiseTech to outperform, with a price target of $110 - implying 35 per cent upside on the current price. But Mr Sherriff said questions remained about the company’s governance.

“Although questions remain on independence of board and founder tail risk, we believe WiseTech’s entrenched market leadership position, long-term growth runway, and attractive forward multiples below 5-yr average now make WiseTech hard to ignore.”

The acquisition comes a day after Mr White appointed former WiseTech chair Andrew Harrison as an ‘independent’ director.

Half the board resigned in February in protest of Mr White’s new $1m per year consulting role. He assumed the position late last year after he stepped down as a director and chief executive following allegations he exchanged business advice for sex.

Following the boardroom exodus, Mr White has since returned to the board as executive chairman, prompting Australian Super to offload its stake in WiseTech, citing corporate governance concerns.

The $355bn super fund progressively sold down its $580m position over the past few weeks and at its peak had $700m invested in WiseTech. It had been WiseTech’s fourth-biggest shareholder and the second-largest outside investor in the company with a 2.79 per cent stake.

“We have been a shareholder and strong supporter of the business since its IPO in 2016, and it has created a significant amount of value for AustralianSuper members,” said Shaun Manuell, the fund’s head of domestic equities.

“We believe good governance is essential to delivering the value we identify in a company. As a long-term active manager, our role is to allocate members’ retirement savings to the companies we think are most likely to create value over the years to come.” Shares in WiseTech were 0.5 per cent lower at $80.85 during midday trade on Tuesday, extending its losses to more than 41 per cent in the past six months.

Editrade – which was founded in 1995, a year after WiseTech – will remain under the current leadership of its chief executive Juan Enrique Ortuzar Elton as part of the deal.

“We’re very proud of our work to develop solutions that optimise management of the logistics chain and documentation, helping our clients to be more efficient, compliant and productive,” Mr Elton said.

“Now we get to build on that valuable legacy and grow our business as part of WiseTech’s global team. We have a shared vision to use automation to simplify customs processing and compliance for more efficient international trade for our customers. This move also brings a range of new career opportunities for our people – we are looking forward to our journey together.”