By Jeff Berman, Group News Editor · February 25, 2020
Shelton, Conn.-based 3Gtms, said today it has acquired Pacejet, a Columbus, Ohio-based provider of enterprise, cloud-based multi-carrier shipping software.
Financial terms of the deal were not disclosed.
3Gtms officials said that bringing Pacejet into the fold will play a major role in extending the company’s 3G-TM platform—which provides various capabilities like order management, planning, optimization, routing, rating, tendering, booking, tracking and settlement, among others—to access more market channels and to more comprehensively serve shipper customers’ complex parcel shipping needs.
Established in 2003, Pacejet was the first company to release a cloud-based shipping software platform for both mid-market and larger businesses, according to Pacejet. The company said that while other shipping software platforms focus on small businesses and mostly parcel shipping, its platform is comprised of real-time integrations between ERP and WMS software.
In an interview with LM, 3Gtms CEO and Founder Mitch Weseley said that the main driver for 3Gtms to acquire Pacejet was that 3Gtms needed much stronger parcel functionality than it already had in certain key accounts.
“We went out to address that need and as we went out there and thought about the opportunity, the real value proposition grew to a number of different dimensions,” he said. “The other thing is we tend to do bigger and more complicated deals…and we have not been able to go after the mid-market. What I think is really exciting is that these are two wonderful businesses with great track records, and we are adding parcel to broaden our high-end offering, and then we can help sell the mid-market as well. Pacejet has a very strong presence and power, and with our power we can bring in inbound, truckload, and logistics companies [to Pacejet]. We really are creating a single company to cover all of the non asset-based logistics/TMS needs.”
With Pacejet part of 3Gtms, Weseley said the company will have a small-to-midsize offering and a large enterprise offering, with some differences and some shared technology.
“From a go to market perspective, you need a TMS and we are going to have an answer, which is really important in the world today, because the term TMS is rapidly being adopted by so many different businesses and types of businesses,” he said. We really want to help clear away the clutter, and as we strengthen the offering, it fills in all the holes. It will be sort of a hybrid approach technologically, which I think is the right approach. We both see a lot of opportunities that the power of each product will fulfill. It is pretty compelling and very exciting.”
Bill Knapp, former CEO and now general manager of Pacejet, a division of 3Gtms, told LM that when he came on board to Pacejet in 2018, the company was looking at a three-year plan, with this deal bringing the plan to fruition earlier than anticipated.
“We had some discussions with other companies, and when we started having conversations with 3Gtms we made a decision that we would come out earlier than planned for all of the right reasons. The technology and the cultures really meshed well.”
What Pacejet was seeing in the mid-market, which Knapp defined as above $10-to-$20 million up to around $250 million in annualized revenue, was very much dominated by ERP platforms and centered around those.
“In that space, we were in a unique position of working with different types of shipping modes and carriers,” he explained. “The complexity of shipping is increasing, and it is very clear to us that the relationship we have been able to accomplish with 3Gtms was going to be vital to our growth.”
Knapp said that while the acquisition is not fully formed as of today, as things progress it will open the doors, for Pacejet customers, to different service levels, including full truckload, inbound shipping capabilities, and other offerings that the Pacejet customer base is asking for on an ever-increasing basis, and also open up their ability to grow with a single platform.
When asked how the integration process will play out, Weseley said that, from a customer-facing side of the business perspective, for sales, services, and support, 3Gtms now has an enterprise product and a mid-market product, with each, at least for the foreseeable future, staying fairly independent, whereas most of the rest of the business will see much more integration with each one having a different path and different analysis to figure out the right way of doing it.
From a competitive perspective, in a market with many established and emerging players, Weseley said this deal helps to solidify the good spot 3Gtms is in and is viewed as a “win-win,” as both 3Gtms and Pacejet are both very good at executing within their respective sweet spots.
“Our sweet spots are limited by what our products do and don’t do,” he said. “It enlarges our sweet spots, and as we go after opportunities, or things that maybe yesterday were a weakness in our products, are now potentially today things that we are going to handle really well. On the sales side, that is how things are going to change. On the go to market side, it just allows us to go out with a single voice. It is a big and competitive market and ultimately I think the key to this industry has always been that customer satisfaction is job one and that reputation is huge and the key to success is delivering quality and delivering value and delivering satisfied customers. And Pacejet also gives us a larger market to sell into now.”
February 21, 2020