Logistics and supply chain software purveyor RedPrairie Corp. today announced that it will acquire GEOCOMtms Inc., a fleet management software supplier, for an undisclosed sum.
The acquisition will expand RedPrairie's footprint in the transportation market, in particular with customers in international geographies that use fleet as the predominant component of the transportation equation, RedPrairie officials said.
The deal, which is expected to close by the end of this month, is the seventh acquisition the company has made since 2004. Privately held RedPrairie declined to disclose terms of the deal or outline future acquisition plans. Officials did say the combined company will maintain the GEOCOMtms sales, R&D, and delivery organizations. The company's products will be re-branded under the RedPrairie name and eventually integrated into RedPrairie's E2e product suite.
According to RedPrairie, E2e's tools help synchronize people and products throughout the customer buying cycle to ensure that goods reach the right place at the right time. At the point of sale, that means helping retailers staff their stores with the right people. In the production cycle, it means enabling suppliers and manufacturers to synchronize shipments and production based on demand signals from the retailer. And in the back room, that translates to having the least amount of inventory, solving the "last yard" problem of the retail supply chain.
The addition of GEOCOMtms A.MAZE Fleet Management product, which includes tools for managing territory design, route planning, trucking dispatch, location-based services, mobile resource management, and fleet maintenance, will fill an important delivery niche in the E2e supply chain and retail flow, RedPrairie officials said today.
"With the ability to plan last-mile, same-day delivery, the GEOCOMtms solution set enables shippers to achieve on-time customer delivery with optimized delivery plans and the ability to react to any in-transit exceptions," said Dan Vertachnik, the senior vice president of RedPrairie's Global Transportation Group, in an e-mail interview with Managing Automation.
ARC Advisory Group issued a forecast in September 2005 predicting that the worldwide market for transportation management systems (TMS) would grow from $910 million in 2004 to $1.2 billion by 2009, representing a cumulative annual growth rate of 6.4%. According to the report, growth is being driven by executives — CFOs in particular — who are beginning to understand the role logistics plays in financial performance.
"Although the concept of providing an integrated fleet management and common carrier TMS solution has existed for several years, client demand is finally gaining momentum," said Adrian Gonzalez, the Logistics Executive Council director at ARC Advisory Group, in a statement today. Logistics service providers and retailers specifically are looking for new ways to reduce costs, improve productivity, and increase asset utilization, he said. "GEOCOMtms differentiated itself with its optimization technology, but it fell behind the competition in terms of execution capabilities, particularly in providing real-time visibility via wireless solutions," Gonzalez continued. "The company addressed these gaps over the past couple of years, but in light of the competitive landscape, joining forces with RedPrairie was a smart decision."
The acquisition will address the needs of a variety of industries, including food and grocery, petroleum, retail, courier, and healthcare delivery. Tim Conroy, RedPrairie's Global Transportation Group president, will oversee GEOCOMtms' Quebec City and Atlanta offices.