Trimble announced that it has agreed to acquire Transporeon, a leading cloud-based transportation management platform, in an all-cash transaction valued at €1.88 billion. Transporeon's software platform provides modular applications that power a global network for 145,000 carriers and 1,400 shippers and load recipients with an integrated suite of best-in-class sourcing, planning, execution, monitoring and settlement tools. Trimble will acquire Transporeon from Hg, a leading software and services investor and current majority shareholder in the business.
Transporeon's open platform integrates with more than 3,000 global ERP and transportation management systems, enabling a dense network to facilitate more than 25 million on-platform transports in 2022. Transporeon helps customers increase competitiveness, lower costs, reduce waste and solve complex freight problems through automation, real-time insights and network participation. Transporeon operates predominantly in Europe, as well as in developed markets across the Americas and Asia.
Consistent with its cloud software model, Transporeon has a strong financial profile with recurring revenue representing over 90% of total revenue, with extremely low churn and net retention consistently in excess of 110%. Transporeon will be immediately accretive to Trimble's revenue growth and margin profile, and has generated profitable growth over the past 15 plus years, through various stages of the economic cycle.
Compelling Strategic and Financial Benefits
- Scaled cloud-based transportation management platform. Transporeon's platform and network enables 145,000 carriers and logistics service providers and 1,400 shippers and load recipients to managing approximately €48 billion of freight spend and over 25 million transports each year. Network participation has grown continuously over 15 years and the platform integrates with more than 3,000 global ERP, WMS and TMS systems.
- Growing and profitable market leader in an attractive market, adds to Trimble's TAM. Transporeon is a scaled, high-growth software platform expected to generate approximately €190 million of revenue in 2023 on a full-year basis, representing approximately 25% growth year-over-year. Transporeon Non-GAAP gross margins in 2023 are expected to be approximately 80%, with Adjusted EBITDA margin of approximately 30% post-closing. The addition of Transporeon expands Trimble's TAM by approximately $5 billion, with its strong footprint into the European market.
- Financially and strategically compelling to Trimble shareholders. Greater than 90% of Transporeon revenue is subscription or recurring transactional revenue, and the business consistently achieves greater than 110% net retention with very low churn. The transaction is expected to be immediately growth and margin accretive to Trimble, and neutral to Non-GAAP EPS in 2024.
- Best-in-class management team. Transporeon's management team is comprised of leaders in software, transportation, supply chain and logistics, and network management. Our shared culture of innovation and customer-centric solutions will help deliver breakthrough customer value.
- Enhances productivity and sustainability solutions for Trimble and Transporeon customers. The transportation industry is both a major contributor to global energy consumption and is notoriously inefficient. Transporeon furthers Trimble's sustainability offering by helping to reduce under-utilized carrier capacity and "empty miles," and to enhance the tracking, reporting and management of emissions.
The all-cash purchase price of €1.88 billion is expected to be funded through a combination of cash on hand and new indebtedness. In connection with the acquisition, Trimble has obtained €1.88 billion in committed financing, subject to customary conditions. Bank of America is serving as transaction financing provider to Trimble. Trimble is committed to maintaining an investment grade rating and expects to rapidly reduce its leverage by limiting additional acquisitions and temporarily suspending share buybacks.
The Transporeon business will be reported as part of Trimble's Transportation segment.
Timing and Approvals
The transaction is expected to close in the first half of 2023, subject to customary closing conditions including regulatory approvals.