Reports indicate Panasonic is set to acquire Blue Yonder for $6.5 billion

Nearly a year after global electronics giant Panasonic made a 20% equity investment in Scottsdale, Ariz.-based Blue Yonder (formerly JDA), a provider of AI-driven and supply chain management software , in May 2020, it looks like the companies may be taking their relationship to the next level, with various media reports indicating that Panasonic will acquire Blue Yonder for $6.5 billion.

No formal announcements regarding this deal were issued by either company. Blue Yonder officials did not reply to LM by press time yesterday (March 8).

But, to be clear, this development is not a done deal. A Reuters report stated that Panasonic “is in the final stages of acquiring the rest of the [Blue Yonder] stock from shareholders including Blackstone Group Inc.,” coupled with a denial of the deal from Panasonic in an e-mail. A report from Nikkei Asia observed that “multiple sources familiar with the matter confirmed that negotiations are in the final stage, but added that there is still a chance the two sides will not reach an agreement.”

The Reuters report added that the acquisition of Blue Yonder would bolster Panasonic’s supply chain management services as the COVID-19 pandemic focuses the attention of companies on their resilience to disruption. And Nikkei Asia noted that Panasonic hopes to leverage its hardware operations by combining them with software, as it has a large share of the market for security cameras used in stores and portable bar code readers used in logistics facilities. What’s more it also pointed out that selling them as stand-alone hardware devices without software would mean lowering prices to stay competitive. In addition, adding software support for supply chains will increase the value of its hardware products.

When Panasonic made its 20% equity investment in Blue Yonder in May 2020, it 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.”

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 reflects the growing importance of supply chain software.

“This is the largest acquisition Panasonic has made in a decade,” he said. “The $6.5 billion dollar 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.”