SPS Commerce Expands Offerings Through Carbon6 Acquisition

SPS Commerce Expands Offerings Through Carbon6 Acquisition

Today marked an important milestone for SPS Commerce, Inc. (NASDAQ: SPSC), a trendsetter in retail supply chain cloud services. The company announced its plans to acquire Carbon6 Technologies, Inc., a key player specializing in software tools designed for Amazon sellers. This strategic acquisition is set to bolster SPS Commerce’s revenue recovery portfolio, catering directly to both first-party and third-party suppliers operating on the Amazon platform.

Enhancing Solutions for Amazon Sellers

The integration of Carbon6 signifies a pivotal enhancement to SPS Commerce's offerings. With solutions like ChargeGuard and Seller Investigators, Carbon6 equips first-party sellers to automate dispute processes related to invoice deductions while enabling third-party sellers to efficiently reclaim lost revenue due to fulfillment errors. This not only simplifies complex supply chain challenges but also supports sellers in maximizing their revenue stream.

Insights from Company Leaders

Jamie Thingelstad, Chief Technology Officer at SPS Commerce, shared insights into the significance of this acquisition. “This acquisition not only expands the reach of the SPS Commerce network but also strengthens our ability to optimize invoice deduction disputes by leveraging data from the SPS network,” he stated. By streamlining access to data, SPS can help suppliers reduce resolution times and minimize invalid deductions.

Joining Forces for Greater Impact

Chad Collins, the CEO of SPS Commerce, emphasized the commitment to enhancing the supplier experience. He mentioned that solutions like SupplyPike, ChargeGuard, and Seller Investigators establish SPS as a leading entity in the rapidly growing invoice deduction management sphere. With this merger, SPS Commerce will solidify its presence in the ecosystems of two of the largest retailers globally, including the burgeoning Amazon marketplace.

Transaction Details of the Acquisition

Under the terms agreed upon, SPS Commerce will acquire Carbon6 for approximately $210 million, with around 40% of this amount payable in SPS Commerce stock. For the first quarter of the upcoming fiscal year, SPS expects the acquisition to contribute about $7 million in revenue, allowing the company to break even in Adjusted EBITDA.

Projected Financial Impact

Looking forward, SPS Commerce anticipates a substantial financial boost, estimating an additional $40 million in revenue for the fiscal year while expecting an uptick in Adjusted EBITDA by approximately $5.5 million. The company plans to share more details regarding the acquisition expense breakdown during its fourth-quarter results presentation.

Live Conference Call Announcement

SPS Commerce will conduct a conference call to discuss this acquisition and next steps. The call will take place at 5:00 p.m. ET, and interested parties can join by dialing the designated numbers at least 15 minutes prior to the event. A live webcast will be made available for those who prefer to attend online. Information on how to access the call can be found through SPS's investor relations platforms.

About SPS Commerce

SPS Commerce stands as the leading retail network, linking trading partners globally to optimize supply chain operations across retail sectors. The company's commitment to innovative cloud technology and customer-centric service has earned it the trust of over 120,000 companies in various domains, including grocery and distribution.

Commitment to Growth and Innovation

With an impressive record of 95 consecutive quarters of revenue growth, SPS Commerce remains committed to driving value and efficiency within the supply chain framework. The merger with Carbon6 is poised to fortify its strategic objectives, aiming to simplify the challenges faced by retailers and suppliers alike in an ever-evolving market landscape.

Frequently Asked Questions

What is the primary benefit of SPS Commerce acquiring Carbon6?

The primary benefit is the enhanced capability to support Amazon sellers in managing invoice deductions and recovering lost revenue via advanced software solutions.

How much is SPS Commerce paying for Carbon6?

SPS Commerce is acquiring Carbon6 for approximately $210 million, with about 40% of this amount in stock.

When can we expect the financial impact of the acquisition?

The financial impact is projected to add about $7 million in revenue for the first quarter and around $40 million in revenue for fiscal year 2025.

Will there be a conference call to discuss the acquisition?

Yes, SPS Commerce will host a conference call to discuss this acquisition and operational details.

What is SPS Commerce known for?

SPS Commerce is known for its extensive retail network and innovative solutions that help businesses optimize their supply chain operations effectively.

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