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Logistics and supply chain technology company Descartes Systems Group Inc. DSG-T said Monday that it would buy Utah shipping software provider XPS Technologies for as much as US$75-million to take advantage of the recent devaluation of e-commerce companies.

XPS helps digital retailers quickly scour shipping rates from multiple carriers and integrates with numerous marketplaces including Amazon.com Inc. and Walmart Inc. as well as e-commerce platforms such as Shopify Inc. SHOP-T XPS has about 10,000 customers, Descartes said.

“All the numbers in this business got crazy because of the pandemic, and now they’re back down to, maybe, the old normal levels,” Descartes chief executive officer Edward Ryan said in an interview Monday. With about US$200-million in cash and an unused US$350-million line of credit available, Mr. Ryan said the company is “ready to put more money to use.” The move extends the Waterloo, Ont., company’s long-running spree of acquisitions.

Retail technology companies have been battered by the market-wide pullback in tech valuations since November, and public companies such as Shopify and Lightspeed Commerce Inc. LSPD-T have seen their market capitalizations collapse by more than 70 per cent. Even Amazon’s shares have lost more than 30 per cent, wiping out hundreds of billions of dollars of their value in the process.

Smaller, private businesses are now more affordable for companies such as Descartes to pluck up, too. “We believe that Descartes would not have been able to make the acquisition ... without the sell-off in public tech stocks,” RBC Capital Markets analyst Paul Treiber said in a note Monday morning.

The all-cash deal for XPS is worth US$65-million plus as much as US$10-million in performance payments if XPS achieves certain revenue targets in its first two years as part of Descartes. It follows the US$4-million purchase of the route-planning software firm Foxtrot last April and the US$40-million February purchase of customs-filing software company NetCHB.

“In our view, the acquisition bolsters Descartes’ e-commerce capabilities and brings on board a sizable and likely complementary customer base that enables cross-sell,” Canaccord Genuity analyst Robert Young said Monday. Stephanie Price of CIBC Capital Markets said the deal “will strengthen Descartes’ offering by combining its e-commerce expertise with advanced parcel shipping technology.”

The 41-year-old company has spent the past several years scooping up e-commerce businesses as it expands its supply chain data and logistics offerings, including warehouse and transportation management. Mr. Ryan said that Descartes will fully integrate XPS into Descartes’ existing systems.

Descartes’ share price has fallen about 30 per cent since the pullback of tech stocks began, though Mr. Ryan said the company doesn’t see itself in quite the same position of most tech companies. He pointed to last quarter’s financial results, released last week, which saw revenue rise 18 per cent to US$116.4-million from a year earlier and profit grow 26 per cent to US$23.1-million.

Rather, Mr. Ryan sees Descartes as well-positioned to deal with the world’s continuing supply chain crisis because of the clarity of data it provides customers. While in the past those customers might have sought to-the-minute data on their most important shipments, “supply chain visibility is something that where they’re saying, ‘Hey, I really need to know where every shipment is,’ ” Mr. Ryan said.

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