The deal is set to close later this year by no later than early fourth quarter, according to Pitney Bowes, which made the announcement Wednesday afternoon. Newgistics’ relationship with the U.S. Postal Service—it processes 100 million packages through the USPS each year—is a primary reason for the acquisition, Pitney Bowes said.
“Newgistics fits uniquely at the intersection of our parcel growth strategies and will accelerate the overall transformation of Pitney Bowes,” Pitney Bowes CEO Marc Lautenbach said.
The USPS on its website lists both Pitney Bowes and Newgistics among its approved shipping consolidators, which means small to medium-sized businesses can use those vendors’ services in order to receive volume shipping discounts that would otherwise be unavailable.
Pitney Bowes is advancing its e-commerce strategy through acquisitions, likely as way to better compete with Amazon.com Inc., says Arthur McManus, senior vice president of provider programs at omnichannel consultancy FitForCommerce.
“Building on their acquisition of Borderfree two years ago, they’ve now added the capabilities of one of the premier domestic e-commerce fulfillment and returns operations in Newgistics,” McManus says. “Another interesting and impactful point of this acquisition is Tactic Knowledge, a division of Newgistics, which powers Pitney Bowes with its e-commerce consulting expertise.”
Fitch Ratings writes that the acquisition makes sense for Pitney Bowes, given the company’s overall strategy.
“Newgistics’ focus on order fulfilment, nationwide parcel delivery and return, and managing digital commerce ecosystems enhances PBI’s existing global e-commerce offerings while also enhancing and broadening PBI’s domestic ecommerce and presort offerings,” Fitch writes. “The acquisition should also provide significant synergy opportunities given the complementary nature of the businesses and minimal customer base and business focus overlap.”
According to Top500Guide.com, Pitney Bowes is the international e-commerce and fulfillment services provider to 74 retailers in the Internet Retailer 2017 Top 1000.