Descartes Acquires Denied-Party Screening Trade Data and Solutions Provider

The acquisition adds comprehensive denied-party screening trade data and solutions to Descartes’ portfolio

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Waterloo, OntarioJuly 21, 2015Descartes Systems Group, a global organization that unites logistics-intensive businesses in commerce via the Global Logistics Network (GLN), announced that it acquired MK Data Services LLC, a U.S.-based provider of denied-party screening trade data and solutions.

Denied-party screening is essential for minimizing business risk today. Governments of various countries, as well as international organizations, maintain a variety of lists of people, organizations and countries that it is restricted or prohibited to do business with. This includes customers, suppliers, employees and business partners for business processes such as contracting, shipping and payment.

Denied-party screening is of critical importance in shipping and international trade. Often, the burden of compliance with these business restrictions is placed on those involved in the logistics of a shipment, such as the exporting business, the logistics intermediary/freight forwarder or the transportation carrier. Penalties for non-compliance can include civil fines, revocation of export privileges and criminal charges. In addition, since penalties are published publicly, non-compliance with these trade restrictions can bring with it tremendous reputational damage.

For over 20 years, MK Data provided comprehensive technology solutions that helped more than 900 businesses comply with these restrictions by screening for transactions with specified parties. As an existing business partner of Descartes with a connection to the GLN, MK Data’s technology screens shipments against a comprehensive, frequently updated international database of restricted parties. MK Data’s proprietary matching algorithms, which customers can sensitivity-adjust to suit their own risk concerns, flag potential compliance issues for prompt resolution. Like Descartes’ Customs Info trade data content, MK Data’s content also powers leading global trade management (GTM) systems, and can be integrated with customer relationship management (CRM) and enterprise resource planning (ERP) systems to enable customers to implement a comprehensive trade compliance program.

"The Global Logistics Network is the logical place for multi-national shippers, logistics intermediaries and transportation carriers to screen for compliance with international trade restrictions," said Edward J. Ryan, Descartes' CEO. "Over 11,000 customers use the GLN to manage and execute shipments every day across various modes of transportation, countries of origin and destination, and commodities. Our combination with MK Data is truly a unifying acquisition for our business, as trade compliance is both an individual and shared interest of every single participant on the GLN."

According to Allan Brett, Descartes' CFO, "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."

MK Data is headquartered in Columbia, Maryland. The purchase price for the acquisition was approximately US $76.3 million in cash plus the assumption of approximately US $7.2 million of contingent and other cash payment liabilities. Descartes intends to provide further information relating to the acquisition in its public conference call relating to its second quarter fiscal 2016 (Q2FY16) financial results, currently anticipated to be in early September 2015. The acquisition is not expected to contribute materially to Descartes' revenues or Adjusted EBITDA for Q2FY16.

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