Logistics technology: SPS Commerce acquires Direct EDI

On-demand supply chain technology provider SPS Commerce recently announced it has acquired Direct EDI, a provider of cloud-based integration technology services.

The purchase price was $10.9 million in cash, according to SPS Executive Vice President and CFO Kim Nelson on a conference call announcing the deal this week.

SPS said that this deal boosts its position as a leading provider of cloud-based supply chain technology and added that “subscribers of SPSCommerce.net and Direct EDI’s services will benefit from expanded operations to support e-commerce and traditional retail supply chains.”

Based in San Diego, Direct EDI is connected to more than 3,000 retailers and thousands of vendors to whom they provide Web-based EDI services focused on e-commerce supply chain connectivity. Its flagship Web-based EDI System allows large enterprises to connect with all supply chain stakeholders and enables small-to-mid-sized enterprises to achieve equal supply chain visibility and connectivity with all their trading partners quickly and without large capital investment, according to its Web site.

Direct EDI has 40 employees and along with its corporate office in San Diego, it has a development center in the Ukraine.

“Since our IPO last year, we have talked about targeting acquisitions to boost our market leadership,” said SPS Commerce President and CEO Archie Black on the conference call. “This strengthens our position as one of the industry’s largest and fastest growing providers of SaaS supply chain solutions.”

Black said the strategic reason for this deal is simple, as Direct EDI is well-known for its leading edge, easy-to-use technology and strong customer focus. And this acquisition allows SPS Commerce to add roughly 1,500 new customers.

“At Direct EDI, we have always believed that our success begins with the success of our customers,” stated Michael Davidovich, Founder and CEO of Direct EDI, in a statement. “I am pleased to announce that we are continuing this commitment by merging our operations with SPS Commerce, a recognized leader in on-demand supply chain solutions and a company that shares our commitment to customer success.”

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