Descartes Systems Group, Inc. provides software and data to transportation providers, logistics service providers, manufacturers, retailers and distributors (1/13) 
The Company was founded in 1981, listed as DSG on the Toronto Stock Exchange in 1998 and as DSGX on the Nasdaq in 1999. In 2003, Descartes began offering their products via a SaaS model (2/13)
On a per share basis, Descartes’ sales and FCF have grown significantly over the past 10 years with FCF return on Assets around 10%. Customers have doubled from 10,000 to 20,000 over the last five years (3/13)
From 2010-2019, Descartes generated $532.1mm in FCF and spent $940.3mm on 36 deals excluding one deal completed this year. Their activity is regular, averaging 3 per year, no fewer than 2 and no more than five. 96% of the consideration across all deals was paid in cash (4/13)
Competition is intense across all of Descartes offerings yet they are unique in the breadth and depth of offerings spanning Transportation Management Softare (TMS), Supply Chain Management (SCM), customs compliance and trade data (5/13)
Among publicly traded companies, Manhattan Associates (MANH) and SPS Commerce (SPSC) both offer Supply Chain Management software, competing with certain of Descartes’ modules (6/13)
DSGX, MANH and SPSC all trade for similar EV / TTM EBITDA – Capex multiples currently, ~27.5x, although not historically. Below are multiples and their medians (dashes) over three years for DSGX (black), MANH (red) and SPSC (blue) (7/13)
Allied Market Research estimates that Supply Chain Management software will grow at ~10% pa and Intek Freight and Logistics (link below) forecasts that the Transportation Management Software market will grow ~30% annualy, both through 2025 (8/13)
blog.intekfreight-logistics.com/tms-market-siz…
blog.intekfreight-logistics.com/tms-market-siz…
Descartes’ acquisitions often are too small to analyze individually but their effects are seen in The Company’s improved margin profiles over the last 10 years (9/13)
In a 2012 study, McKinsey found that high-tech businesses were most succesful using a 'tactical' M&A strategy, regularly buying businesses representing a small portion of their market cap. Descartes uses 'tactical' M&A to add customers and capabilities onto their platform (10/13)
The Company’s results from 2007-2009 demonstrate the business model’s resiliancy and potential for market share gains during recessions (11/13)
The Company eschews debt and has raised equity twice since 2014. In each case, multiples were at then all-time highs and the stock price reacted positively on a beta-adjusted basis (12/13)
In addition to equity raises, challenges for Descartes are continuing to outpace their competition, succesfully integrating and cross-selling previous acquisitions while also sourcing and closing on new deals (13/13)
