Local tech unicorn WiseTech Global’s growth through acquisition strategy is once again in the spotlight, with the logistics software maker formally recognising that some of the companies it has bought are not performing as expected.
Wisetech told the ASX on Thursday it has renegotiated earnout arrangements for 17 of its acquisitions, with the company replacing cash payments with equity as part of the process.
Earnouts are used to reward the sellers of an acquired business if it is successful in achieving certain financial goals. The changes have closed off all future earn outs for WiseTech on 14 acquisitions including ABM Data, CargoSphere, SmartFreight and Cargo IT.
WiseTech CEO Richard White has had to defend the company’s acquisition strategy. Credit:Jesse Marlow
“In the coming months, we will embark on a similar earnout review for a number of remaining
acquisitions, which are primarily geographic footholds with product development targets already in
place,” the company said.
