Japanese multinational electronics company, Panasonic will buy US supply-chain software company Blue Yonder in a deal worth $7.1 billion in order to meet growing demand from the companies.
According to the company statement, Panasonic, which purchased a 20 percent stake in Blue Yonder for $797 million (86 billion yen) last year, will buy the remaining 80 percent from shareholders including Blackstone Group and New Mountain Capital, in an agreement, including debt, that values US company at $8.5 billion.
“The need for more intelligent, autonomous, and edge-aware supply chains has been dramatically heightened by the COVID-19 pandemic,” Panasonic said.
Panasonic plans to pay for half of the acquisition with cash and the rest with a bridge loan that will be refinanced with subordinated bonds and other hybrid financings, as per the company.
“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.”
Panasonic, which is best known for consumer electronics and appliances, has recently shifted its emphasis to manufacturing parts and providing services to other companies, such as batteries for Tesla’s electric cars.
In May, the Japanese firm strengthened its relationship with Blue Yonder by gaining a seat on the company’s board of directors after acquiring a minority stake. The US company uses machine learning to help firms in managing supply chains that link factories to warehouses and retailers.
“This association came about as a result of three years of working together, first with Panasonic as a Blue Yonder customer and thereafter as a 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 on fulfilling our customers’ potential,” commented Girish Rishi, CEO of Blue Yonder.
The Blue Yonder deal will be Panasonic’s largest acquisition since it spent $7.4 billion (800 billion yen) to make Sanyo Electric and Panasonic Electric Works wholly-owned subsidiaries in 2011.