Panasonic’s long-anticipated acquisition of Blue Yonder is a done deal

Following weeks of mixed reports regarding the future of Scottsdale, Ariz.-based Blue Yonder (formerly JDA), a provider of AI-driven and end-to-end supply chain management service—one in early March which indicated it was going to be acquired by global electronics giant Panasonic, and an another earlier this month indicating it had “confidentially filed paperwork with the Securities and Exchange Commission for a proposed initial public offering”—it appears the former is going to come to fruition.

Panasonic formally said earlier today that it will acquire Blue Yonder by purchasing the remaining 80% of shares of Blue Yonder, for $5.6 billion (USD), coupled with the 20% of Blue Yonder shares Panasonic acquired in May 2020, when it acquired a minority ownership stake and one seat on the Board of Directors of Blue Yonder, with New Mountain Capital and funds managed by Blackstone remaining majority shareholders of Blue Yonder fully committed to supporting the company’s strategic vision.

Panasonic said that including repayment of outstanding debt, the additional investment totals $7.1 billion, valuing Blue Yonder at USD8.5 billion. This transaction has been approved by both the Panasonic and Blue Yonder Boards of Director and is expected to close by the second half of 2021 and is subject to receipt of customary regulatory materials, according to Panasonic.

A Blue Yonder spokesman previously told LM, at the time, that this expanded partnership would accelerate Blue Yonder’s AI/ML (machine learning) platform to drive faster, more context-aware business decisions for global supply chains and accelerate the promise of the Autonomous Supply Chain.  And he added that Blue Yonder and Panasonic would combine resources and work closely with partner companies in Japan to fuel growth by selling Blue Yonder’s Luminate solutions and bringing forth new, jointly developed solutions.

“I’m extremely happy to welcome Blue Yonder and its associates to the Panasonic Group, said Panasonic CEO Yuki Kusumi in a statement. “Both companies have the same mission to support customers’ frontline operations and we have a high affinity in our corporate cultures. By merging the two companies, we would like to realize a world where waste is autonomously eliminated from all supply chain operations and the cycle of sustainable improvement continues. There are still many such losses and stagnation in supply chain operations, so through the drastic reduction of wasted labor and resources, we would like to provide better ways of working, and contribute to customers’ management reform and also to the realization of a sustainable society by carefully using limited global resources. I am confident that by combining the power of Blue Yonder and Panasonic, we can create innovation in global supply chains.”

Panasonic outlined various benefits that the deal will provide, including:

• strengthening Panasonic’s portfolio and accelerating the companies’ shared Autonomous Supply Chain mission, empowering customers to optimize their supply chains using the combined power of AI/ML and IoT and edge devices;
• unifying supply, demand and commerce solutions with IoT and edge technologies, enabling companies to better utilize predictive business insights to pivot their operations in real-time;
• combining Panasonic’s strength in industrial engineering, IoT and edge technologies with Blue Yonder’s AI/ML-driven supply chain and commerce solutions augments the customer value of Blue Yonder’s leading digital fulfillment platform; and
• collectively, Panasonic and Blue Yonder will deliver a unique competitive advantage for customers to drive more automation and actionable, real-time business insights that reduce waste and improve operations, while creating a more sustainable world

For calendar year 2020, total Blue Yonder revenue topped $1 billion, with 67% of it recurring revenue, and as of December 31, 2020, SaaS annual recurring revenue was $343 million and SaaS net revenue retention rate was 120%.

Panasonic said bringing Blue Yonder into the fold boosts its digital transformation and customer-centric focus, adding that effective April 1, 2022, “the Panasonic Group will shift to a holding company system concentrating management resources on strategic businesses in key areas such as providing supply chain innovation and automation.”

In terms of leadership, Panasonic said that Yasuyuki, CEO of Panasonic’s Connected Solutions Company (set to become Panasonic Connect Co., Ltd. on April 1, 2022) will leads this unit, and Blue Yonder CEO Girish Rishi and the extended leadership team will join the new organization and the Blue Yonder brand will be retained and business will function within the Panasonic Connected Solutions Company umbrella, it added.

“I am thrilled to announce that Blue Yonder is joining Panasonic,” Rishi said in a statement. “This association came about as a result of three years of working together, first with Panasonic as a Blue Yonder customer and thereafter as joint venture partner. We have developed mutual trust and have a shared vision for an Autonomous Supply Chain that delivers a better life and a better world. As the essential platform for essential times, we are relentlessly focused in fulfilling our customers’ potential.”

In early March, when the possibility of Panasonic acquiring Blue Yonder was first broached, Ben Gordon, Managing Partner of Cambridge Capital, an investor in niche supply chain leaders, and also Managing Partner of BGSA Holdings, a leading mergers and acquisitions advisory firm focused on the transportation, logistics, and supply chain technology sectors, said that the Panasonic acquisition of Blue Yonder reflected the growing importance of supply chain software.

“This is the largest acquisition Panasonic has made in a decade,” he said. “The purchase gives them the ability to combine hardware and software. This is a strategic initiative that could provide Panasonic with a leg up in comparison with other hardware providers. Will Blue Yonder pull back and stop selling software to other hardware and electronics providers? It could be the 2021 is the year of the supply chain. In other words, this could be a signal of the growing global recognition of the importance of supply chain.”

When reports surfaced that Blue Yonder was vetting possibly going public earlier this month, it said that the number of shares to be offered and the price range for the proposed offering had to be determined, adding that the initial public offering was expected to take place after the SEC completes its review process, subject to market and other conditions.

A Wall Street Journal report observed that, according to research firm Gartner, Blue Yonder is the third largest supply chain management software provided based on 2019 revenue, trailing SAP and Oracle.

What’s more, the report pointed to other nascent logistics technology players getting involved on the IPO front, with Chicago-based project44, a technology services provider offering standardized, secure Web service API (application programming interfaces) integrations enabling 3PLs and shippers to connect with carriers in real time, said to be considering an IPO sometime in the next 18-to-24 months, and E2open, a provider of cloud-based service for collaborative planning and execution across global trading networks, going public in early 2021 with a special purpose acquisition company (SPAC).

In February 2020, Blue Yonder changed its name from JDA. The company said that the name change was part of a re-branding initiative in an effort to better align its name with its cloud transformation and product roadmap and also to embrace endless innovation in the future, as well as continuous improvement and a focus on outstanding customer experience, too. 

The company explained that changing its name and brand from JDA to Blue Yonder “further supports the massive impact of AI and ML technology across the supply chain, logistics, and retail markets,” adding that “Blue Yonder’s leading AI/ML technology powers the Company’s Luminate end-to-end digital fulfillment platform.”