The WiseTech Global Ltd (ASX: WTC) share price is dropping lower on Thursday after the release of an update.

At the time of writing the logistics solutions company’s shares are down 3.5% to $21.60.

What was in WiseTech’s update?

This morning WiseTech provided the market with an update on the earnout arrangements it has for many of the bolt-on acquisitions it has made in recent years.

Earnouts are used during acquisitions to reward the sellers of a business if the acquired business goes on to achieve certain financial goals.

According to the release, it has worked collaboratively with 17 of its acquired businesses to simultaneously reduce and close-out future earnouts and replace significant cash payments with equity.

WiseTech Global Founder and CEO, Richard White, explained: “The current environment provided us with the opportunity to restructure previously agreed acquisition earnouts, ensuring we can better drive those resources, accelerate their contribution to CargoWise development, and further improve our commercial efficiency.”

“Our shared vision and alignment with our Founder MDs enabled us to close out these arrangements efficiently, remove significant contingent cash obligations and reduce future contingent liabilities. The leaders across our acquired organisations remain in the Group and are focused on delivering value for shareholders.,” he added.

What are the changes?

The company revealed that the negotiations have resulted in:

• Reduction in contingent liabilities overall from $215.5 million to $68.5 million.
• Removal of $151.5 million of future contingent cash liabilities.
• Equity issuance of $81.4 million of which $45.7 million remains escrowed for 12 months.
• The complete close-out of all future earnouts for ABM Data, CargoIT, Cargoguide, CargoSphere, CustomsMatters, DataFreight (LSI), Microlistics, Pierbridge, SmartFreight, Softcargo, SaaS Trans, Trinium, and Xware.
• The replacement of cash earnouts with equity for Cypress, Depot Systems, Forward, and SISA: part immediate equity close-out, and part future equity earnouts of $10.9 million based on product development.

The company will now review earnouts for the remaining acquisitions it has made.

In other news, WiseTech revealed that it remains on target to achieve its guidance for FY 2020.

Mr White advised: “In the current environment, our business continues to demonstrate resilience and tracks in line with our expectations.”

More reading

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• Fund managers have been buying these ASX shares
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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of WiseTech Global. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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There are some great ASX shares to buy for Warren Buffett-like value investors right now. The S&P/ASX 200 Index (ASX: XJO) is down 13.60% this year and is going from bear to bull on an almost daily basis.

That volatility and market noise is good for experienced investors. Here are a few ASX shares I think even the ‘Oracle from Omaha’ couldn’t ignore at today’s prices.

3 ASX shares even Warren Buffett couldn’t ignore

There’s no doubt Buffett is one of the world’s greatest ever investors. He keeps things simple, looks for strong earnings potential and creates value through ownership.

Now, if you’re a Fool with $5,000, you won’t be able to effect great strategic change today. But what you can do is invest in undervalued ASX shares with strong earnings potential.

I like the look of CSL Limited (ASX: CSL) right now. CSL is a leading biotech group with a $130.77 billion market capitalisation. With a strong research and development pipeline, and after falling 6.38% lower in yesterday’s trade, CSL shares could be in the buy zone.

Another ASX share worth a look today is Wesfarmers Ltd (ASX: WES). Wesfarmers is a diversified conglomerate that is sitting on a big pile of cash after selling a $1.1 billion stake in Coles Group Ltd (ASX: COL).

Wesfarmers is in a strong financial position and is looking to restructure its underperforming Kmart Group segment. That could be good news for investors like Warren Buffett who like to see efficiency and strong cash flow.

Finally, I like National Australia Bank Ltd. (ASX: NAB) shares right now. NAB shares are down 23.3% this year, at the time of writing, but could bounce back as we begin to recover from the coronavirus-led economic fallout.  

Despite some regulatory headwinds and intensifying competition, I think NAB will continue to churn out dividends for shareholders in years to come.

Foolish takeaway

These are just a few of the ASX shares that could be undervalued right now. Warren Buffett has proven to be a patient investor who isn’t afraid to sit and wait for the right opportunity.

More reading

• 1 key trait to look for with most top ASX growth shares
• What would $50,000 invested in the ASX 200 a decade ago be worth today?
• Is the Transurban share price a buy today?
• Should you ever buy ASX shares at an all-time high?
• 3 quality ASX dividend shares for income investors to buy today

Ken Hall has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of CSL Ltd. The Motley Fool Australia owns shares of COLESGROUP DEF SET and Wesfarmers Limited. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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