WiseTech locks in $4.7b in financing to secure biggest US purchase yet, page-13

I have to say that I'm a bit bemused by all of this; not so much what they have bought (like the market, I like the acquisition: I think it is strategically smart, and being acquired at what looks like an attractive valuation), but how they are funding it, i.e., exclusively with debt.

One would have thought, given WTC's market valuation, that its cost of equity would be a lot cheaper that what debt would be costing the company today, so one might have expected some kind of issuance of equity to firm up what is going to be a bit of a lopsided balance sheet once this deal is done - lots of debt contrasted with very little in the way of tangible assets.

But maybe the WTC Board is smarter than that and anticipated a favourable share price response to the deal and the equity raising is still to follow.

Or - arguably, the first prize for shareholders - the Board continues to demonstrate a high level of respect for the Share Capital account and decides to trade down the level of borrowings over time.

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