Post by
retiredcf on Aug 17, 2022 8:59am
CIBC
Have a $190.00 target. GLTA
EQUITY RESEARCH
August 16, 2022 Flash Research
KINAXIS INC.
Acquires MPO – Extending Into Supply Chain Execution
Conclusion: Incremental Positive. Kinaxis announced the $45 million
acquisition of European-based MPO this morning. MPO provides a
SaaS-based platform for order orchestration, inventory and transport. With
the acquisition, Kinaxis extends its platform into supply chain execution,
allowing users of Kinaxis’ RapidResponse platform to dynamically respond to
disruptions in transportation and providing a more complete picture of every
order across the lifecycle. We assume that the acquisition will be neutral to
Kinaxis’ 2023E financials and potentially increasingly positive in later years
as Kinaxis cross-sells MPO into its base.
Highlights
Acquires MPO: MPO offers a SaaS-based platform for multi-party
orchestration of orders, inventory and management. Kinaxis paid $45 million
(75% cash/25% equity) for the acquisition, with the equity consideration
dependent on the acquisition meeting certain revenue and execution goals.
The transaction closed August 15. No additional financial details were
provided.
Extends The Platform Into Supply Chain Execution: The MPO acquisition
extends Kinaxis’ platform into supply chain execution, allowing the company
to provide offerings from planning through last-mile execution. The
combination of the two platforms offers customers a view across the supply
chain lifecycle – from planning to delivery – allowing planners using
RapidResponse to react and respond to disruptions in transportation and
logistics.
Adds Depth To Industry Verticals: MPO focuses on similar industry
verticals to Kinaxis, adding further industry-specific depth to its offering.
MPO’s vertical specializations include manufacturing, retail, high tech and
pharma/healthcare, in addition to wholesale/distribution providers.
Expect M&A To Continue: Kinaxis ended Q2 with net cash of $258 million.
With private market valuations potentially falling, we see it as an attractive
market for M&A and view Kinaxis as well positioned to continue to execute
on tuck-ins that build out its solution set.