Panasonic to acquire Blue Yonder

Panasonic Corporation announced today it has agreed to acquire Blue Yonder, a digital fulfillment platform provider whose software applications are widely used in industry, including its warehouse management system (WMS) software and supply chain planning and execution applications.

Panasonic will purchase the remaining 80% of shares of Blue Yonder, for $5.6 billion, adding to the 20% 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 today between Panasonic and the existing shareholders New Mountain Capital and funds managed by Blackstone.

According to the companies, the acquisition accelerates the realization of a more “autonomous” supply chain supported by applications that use artificial intelligence (AI) and machine learning (ML). The need for more intelligent, autonomous and edge-aware supply chains has been dramatically heightened by the COVID-19 pandemic, the rise of e-commerce and the proliferation of data, the companies observed. The acquisition is positioned as 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 Internet of Things (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, the companies added.

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 a software platform called Luminate driven by AI/ML that serves as a “system of intelligence” for its global retail, manufacturing and logistics customers. According the acquisition announcement, for calendar 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%.

The acquisition also is positioned as enhancing 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 (to become Panasonic Connect Co., Ltd. on April 1, 2022) 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.

“I’m extremely happy to welcome Blue Yonder and its associates to the Panasonic Group,” stated Panasonic CEO Yuki Kusumi. “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 added, “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 added, “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. Investor relations materials on the deal can be found here.