Logistics information services provider GT Nexus and financial services company TradeCard said today they have merged their operations to provide global businesses with a single-sourced package for logistics visibility and access to capital.
The transaction was billed as a merger of equals, with no clear determination of which firm was being acquired. The private equity unit of Warburg Pincus and another private equity firm, Primerica, were instrumental in bringing together the two companies, according to Bryan Nella, TradeCard's director of marketing communications. Financial terms were not disclosed. The deal is expected to close in early 2013.
The company will be headquartered in Oakland, Calif., where GT Nexus is based. TradeCard CEO Sean Feeney will be chief executive officer of the merged company, GT Nexus CEO Aaron Sasson will be chairman of the board, and TradeCard Founder Kurt Cavano will be vice chairman.
Specifics about the company name and leadership structure will be announced when the deal is done, the companies said.
Oakland-based GT Nexus is a leader in "cloud-based" technology that connects the physical order, shipping, and distribution functions of multiple global partners across a web-based platform. New York-based TradeCard has access to billions of dollars in capital through its relationships with lenders of various stripes.
The two companies are complementary as TradeCard essentially uses the Web to simplify the letters of credit that facilitate the payment terms between Western importers and Asian producers and most of GTNexus' technology helps with trade compliance.
Prior to the merger announcement, each company had begun to encroach on the other's specialty. GT Nexus began offering financial services to augment its physical distribution capabilities, while TradeCard had begun making inroads in the logistics arena.
According to Nella, a transaction involving the merged entity would work something like this: An overseas supplier receives a purchase order across the GTNexus system from a major U.S. retailer to produce 100,000 pairs of shoes. The supplier, needing fast access to capital to ramp up production, can click a website link and activate TradeCard's services. After addressing the legal framework and assuring the buyer's ability to pay, TradeCard provides funds to the supplier within a few days, Nella said.
As production proceeds, the retailer and lender can leverage GTNexus' visibility strengths to manage the process in real-time, Nella said. The retailer knows his order is on track to be completed, and the lender knows it is one or two steps closer to being repaid, according to Nella.
The companies boast that together they will become the world's biggest cloud information utility with a global network of over 20,000 businesses spanning virtually all of the major industry groups. The companies said they will manage more than $100 billion in direct supply chain trade.
"The strengths of each company are highly complementary and will offer customers a complete solution, covering the entire supply chain execution lifecycle, from sourcing of goods to final delivery and payment," said Feeney.