Logistics software firm Descartes Systems Group will acquire Columbia, Md.-based MK Data Services LLC for $83.5 million, saying the move would help its clients comply with trade regulations by screening their customers and suppliers.
MK Data provides "denied-party screening," a service that enables clients to avoid doing business with banned partners by searching for their names on multiple sanction lists. The company maintains a comprehensive database of so-called restricted parties, such as individuals, companies, or countries that face sanctions by courts, treaties, or law enforcement around the world. Its proprietary suite of matching algorithms already integrates with many global trade management (GTM), customer relationship management (CRM), and enterprise resource planning (ERP) systems.
The screening process is particularly important for exporters, logistics intermediaries, freight forwarders, and transportation carriers, who bear the cost of regulatory compliance and can be heavily penalized for any missteps. Penalties can include civil fines, revocation of export privileges, criminal charges, and reputational damage. Waterloo, Ont.-based Descartes said the MK acquisition would dramatically help customers with their compliance efforts.
Descartes executives said they expect the merger process to proceed smoothly. The two companies are already business partners and share a connection to the Global Logistics Network (GLN), an umbrella network of firms that pool their standards and financial resources for forwarding, logistics, customs brokerage, and related services.
"MK Data has been a growing, high-margin business with increasing relevance to the trade community," Alan Brett, Descartes' CFO, said in a statement. "MK Data's solution has flexibility that enables targeted screening of individual shipment transactions over the GLN as well as ongoing compliance screening of our customers' own roster of prospects, customers and suppliers."
Descartes will also absorb MK Data's 900-plus customers, adding them to its "Logistics Technology Platform" for improving rate management, dock appointment scheduling, transportation management, routing and scheduling, and in-transit inventory visibility.
