Panasonic Acquires Blue Yonder For $7.1B

Japanese electronics giant Panasonic Corp. has announced it will acquire supply chain software company Blue Yonder after an agreement was reached with its existing shareholders New Mountain Capital and Blackstone.

Panasonic previously took a 20% stake in the software company in July and Friday confirmed it will purchase the remaining 80% for $5.6 billion. This additional investment totals $7.1 billion after debt repayment and values Blue Yonder at $8.5 billion.

This announcement comes two weeks after Blue Yonder, headquartered in the U.S., confidentially filed a proposed initial public offering (IPO) to the Securities and Exchange Commision.

Prior to Blue Yonder's proposed IPO, the two companies were already in talks for the Japanese firm to buy its remaining stake in the software company. At the time, the purchase was valued at $6.45 billion, according to a report by Nikkei Asia.

The two companies have maintained a strong relationship as Panasonic has focused on pivoting its hardware to combine software to improve operational efficiency for the end consumer. Blue Yonder's Luminate Planning solutions had previously been incorporated into a number of Panasonic's Mobile Solutions Business Division to improve the accuracy of its own supply chain.

"I'm extremely happy to welcome Blue Yonder and its associates to the Panasonic Group," said Yuki Kusumi, the chief executive officer of Panasonic. "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."

In a recent interview with FreightWaves on Panasonic's technology offerings, Jim Dempsey, the director of U.S. business development and partnerships at Panasonic North America, explained how combining its technologies with Blue Yonder's can improve the outcome of its hardware offerings.

"[With Blue Yonder] we started figuring out how we can layer in artificial intelligence to our systems to allow our customers to be predictive and not reactive," he said. "These systems can start healing themselves as things are happening. If you see certain patterns occurring with your supply chain, the system will start making decisions, seeing this pattern before, and knows how to address it."

As many supply chains are currently experiencing issues with capacity shortages due to record level imports and consumer buying habits, systems that can be predictive and solve potential problems will become even more necessary for companies to meet consumer demand.

"If [the system] knows there's weather, like a snowstorm, predicted in … in the Northeast in the next 10 to 12 days, then a company like Home Depot can preposition snowblowers to its stores," said Dempsey. "If my traditional transportation network is tapped out, I need to access other sources. [The system] will go and even search Uber and our integration with drones and other types of robotics to get the shipment to the customer at the right time."

Click here for more articles by Grace Sharkey.

Related Articles:

Panasonic to acquire Blue Yonder for $6.5B — Nikkei Asia report

Blue Yonder submits proposal for IPO

Redwood Logistics integrates with Blue Yonder for real-time capacity, pricing