Minneapolis-based SPS Commerce makes second $200M acquisition in six months

Minneapolis-based SPS Commerce made its second multimillion-dollar acquisition within six months, announcing on Friday its $210 million purchase of a company that provides software tools to Amazon sellers.

Leaders at SPS, a retail supply chain software company, expect Carbon6 Technologies to pull in about $40 million in revenue for fiscal year 2025, with Carbon6’s growth being slightly faster than SPS Commerce’s, said SPS CFO Kim Nelson.

In August, SPS acquired SupplyPike — an “automated invoice deduction management and prevention solution,” according to a news release, that Walmart uses — for $119 million in cash and $87 million in stock. That deal is very similar to the Carbon6 acquisition, of which about 40% of the purchase price is also stock.

“SPS is committed to helping our customers operate efficient supply chains with their retail partners,” company CEO Chad Collins said during a call with investors Thursday afternoon.

“The addition of Carbon6’s solutions builds on SPS’s acquisition of SupplyPike, expanding our revenue recovery portfolio with increased support for Amazon sellers.”

The acquisition comes amid a period of growth for SPS, which referred to itself in the news release as “the world’s leading retail network, connecting trading partners around the globe to optimize supply chain operations.”

The company has seen its annual revenue roughly double since the start of the pandemic, and its stock price has increased about 230% over the past five years.

Collins told investors that Carbon6 helps first-party Amazon sellers manage invoice deductions by automating the dispute process. It also helps third-party sellers recover revenue losses from fulfillment errors, he said. Through these processes, sellers maximize revenue, Collins said.

Because Amazon is dominant, Collins said, it’s important to have specialized capabilities to address the company’s marketplace. Nelson said the acquisition brings SPS a net 6,500 new customers.

Pending regulatory approval, SPS expects the acquisition to close in the first quarter of this year, generating $7 million in revenue during that three-month period.

SPS nearly became insolvent at the turn of the century before turning toward an era of explosive revenue gains and transforming into a public company. In a 2023 interview, Collins said he was looking toward more international expansion as part of the company’s strategy to continue its steady growth.

“We think we’ve established here a clear leadership position in a market that is large and has lots of opportunity for growth moving forward,” he told investors Thursday.