Panasonic to acquire US supply chain software firm Blue Yonder for $7.1 billion
Panasonic Corporation will acquire Blue Yonder, the leading end-to-end, digital fulfillment platform provider. Panasonic will purchase the remaining 80 percent of shares (for $5.6 billion) of Blue Yonder, adding to the 20 percent which Panasonic acquired in July 2020. Including repayment of outstanding debt the additional investment totals $7.1 billion, valuing Blue Yonder at $8.5 billion. An agreement to purchase the remaining shares of Blue Yonder was reached on April 23 between Panasonic and the existing shareholders New Mountain Capital and funds managed by Blackstone.
The need for more intelligent, autonomous and edge-aware supply chains has been dramatically heightened by the Covid-19 pandemic, the rise of ecommerce and the proliferation of data. This acquisition strengthens Panasonic’s portfolio and accelerates 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. By unifying supply, demand and commerce solutions with IoT and edge technologies, companies can 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 greatly intensifies the customer value of Blue Yonder’s leading digital fulfillment platform. Together, 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.
This acquisition builds on the Panasonic/Blue Yonder strategic relationship, established in January 2019 with a partnership, followed by the creation of a joint venture company in Japan in November 2019. In July 2020, Panasonic took a 20% minority ownership stake and one seat on the Board of Directors of Blue Yonder. This acquisition brings the strategic relationship full circle.
Blue Yonder is a supply chain industry leader, providing an end-to-end platform driven by AI/ML that serves as a “system of intelligence” for its global retail, manufacturing and logistics customers. Its cloud-based LuminateTM platform seamlessly manages all nodes of the supply chain across planning, execution and commerce on one unified platform.
For the year ended December 31, 2020, total company revenue was over $1 billion, 67% of which was recurring revenue. As of December 31, 2020, SaaS annual recurring revenue was $343 million and SaaS net revenue retention rate was 120%.
Acquisition accelerates Panasonic’s supply chain and automation strategic focus
This acquisition enhances Panasonic’s own digital transformation and customer-centric focus. On 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.
Yasuyuki Higuchi is the CEO of Panasonic’s Connected Solutions Company, which leads this business area. 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.
Panasonic CEO Yuki Kusumi stated, “I’m extremely happy to welcome Blue Yonder and its associates to the Panasonic Group. 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."
Girish Rishi, CEO of Blue Yonder stated, “I am thrilled to announce that Blue Yonder is joining Panasonic. 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.”
Peter Masucci, managing director of New Mountain Capital stated, “We first began building Blue Yonder over 10 years ago, and the company has grown significantly since then. We’re proud to have supported the company’s transformation into the world’s leading end-to-end, digital fulfillment platform provider. We thank Blue Yonder’s management team and associates, Blackstone, and Panasonic for their partnership with New Mountain in this process.”
Martin Brand, senior managing director of Blackstone stated, “We are proud to have partnered with New Mountain Capital and Panasonic to support Girish and his team in their transformation of Blue Yonder into the supply chain SaaS leader through accelerated investment in innovation and machine learning capabilities. The company will have a bright future as part of the Panasonic Group.”
The transaction has been approved by the boards of directors of both Panasonic and Blue Yonder. The deal is intended to close by the second half of this fiscal year and is subject to receipt of customary regulatory approvals.