MK Data Services: Analyst welcomes Descartes Systems acquisition of MK Data Services

Descartes Systems (TSE:DSG) (NASDAQ:DSGX), a logistics software specialist, has acquired MK Data Services for US$76 million, a US firm specializing in data management for exporters, financial institutions and carriers involve in global trade.This is the Ontario based company's biggest acquisition to date and RBC analyst Paul Treiber, who has set a target price of US$19/share, has praised the move, suggesting that MK Data could add 9% or US$ 0.08 to Descartes's earnings per share in 2016 and more thereafter."Descartes Leaders can easily evaluate the potential for cross-selling solutions since Descartes already acted as MK Data dealer," says Treiber, who also noted the fact that MK Data is very complementary to the customs data division of Descartes.MK Data keeps track of countries or individuals that have been excluded from business dealings for any number of reasons from sanctions to other legal issues. It provides a useful service and "it is absolutely essential for companies to do it" according to Descartes's president Scott Pagan.When companies do not perform due diligence in screening "denied parties" they risk their reputation with potential legal repercussions, lifting of export licenses or even criminal charges suggest Pagan.This acquisition will help Descartes' international customers stay compliant with all the denied party lists and rules.The Waterloo-based logistics data and services company announced this week it is buying MK Data Services, a Maryland-based company that is a leading provider in "denied party screening" data and solutions.A global leader in supply chain management, Descartes has concluded 29 acquisitions to date. The company still has US$47 million in cash and access to US$77 million in financing to conclude further purchases.