A little more than one month after reports surfaced suggesting that global electronics giant Panasonic was set to acquire, in Scottsdale, Ariz.-based Blue Yonder (formerly JDA), a provider of AI-driven and end-to-end supply chain management services, a report in the Wall Street Journal indicated that Blue Yonder instead plans to become a publicly traded company.
The report stated that last Friday Blue Yonder “confidentially filed paperwork with the Securities and Exchange Commission for a proposed initial public offering,” marking another example of a logistics technology provider vetting going public, “as pandemic-driven upheaval in supply chains draws more interest to tools that help companies manage the flow of goods.”
Blue Yonder officials did not reply to LM by press time, regarding this development. But a company statement said that the number of shares to be offered and the price range for the proposed offering have not yet been determined, adding that the initial public offering is expected to take place after the SEC completes its review process, subject to market and other conditions.
The WSJ report also 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).
“Blue Yonder is a market leader in supply chain software,” 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 sector, told LM. “Panasonic could have acquired the business. It appears that the board concluded the public markets would value it more highly than Panasonic. And given the strong demand for supply chain software from public markets and private equity, I believe they are right.
For a point of comparison, Gordon explained that E2Open just returned to the public markets via a SPAC merger and is being valued at $2 billion, with the company growing approximately 9% last year, from $305 million to $335 million.
“Blue Yonder has blue-chip customers like Penske Logistics, Albertsons, L.L. Bean, Heineken, and PetSmart,” said Gordon. “They have built a broad suite of supply chain services. They are growing faster than E2Open. And they could command a higher multiple as a result. I believe the public markets remain extremely interested in high-quality supply chain firms.”
In early 2020, Panasonic made a 20% equity investment into Blue Yonder and also obtained one seat on the Blue Yonder Board of Directors, with New Mountain Capital and funds managed by Blackstone remaining majority shareholders of Blue Yonder fully committed to supporting the company’s strategic vision.
A Blue Yonder spokesman told LM, at the time, that this expanded partnership will 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 will 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.
And Yasu Higuchi, Representative Director of Panasonic Corporation and CEO of Panasonic’s Connected Solutions Company, explained, in May 2020, that modern day supply chains face a number of challenges including rapidly shifting demand, hyper-personalization of consumer needs, labor shortages and operational inefficiencies.
“[S]o by further developing our relationship with supply chain software specialists Blue Yonder, I believe we will be able to make larger, more transformative contributions to a greater number of customers,” Higuchi said. “In order to do so, we aim to gain a deeper understanding of Blue Yonder’s advanced global solutions and business model so that we can augment and further elevate our own solutions capability. Through this collaboration, we aim to become a global leading provider of frontline process innovation.”
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.”