Panasonic acquires supply chain, AI software provider Blue Yonder in $7.1 billion deal

The massive purchase builds upon a 20% investment made last year.

Panasonic has gone all-in on a past investment into Blue Yonder to fully acquire the company in a deal worth $7.1 billion.

Under the terms of the purchase, made public on Friday, Panasonic will acquire 80% of remaining shares from Blue Yonder for $5.6 billion. The acquisition terms also require the repayment of outstanding debt, bringing the total value of the purchase to $7.1 billion. 

Panasonic purchased a 20% stake in Blue Yonder last year for roughly $790 million, deepening an existing partnership between the companies that was forged in January 2019 -- followed by the creation of a joint venture (JV) in April of the same year. 

Founded in 1985 and led by CEO Girish Rishi, Blue Yonder is a supply chain solutions provider and the creator of the Luminate platform. The firm harnesses artificial intelligence (AI) and machine learning (ML) algorithms for planning, automaton, and e-commerce services. 7-Eleven, Asda, Avon, and Best Buy are among the company's enterprise clients. 

Blue Yonder is now valued at approximately $8.5 billion. Total company revenue for the year ending December 31, 2020, was over $1 billion, a substantial portion of which was reported as SaaS-based recurring revenue. 

"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 said. "This acquisition strengthens Panasonic's portfolio and accelerates the companies' shared autonomous supply chain mission."

Panasonic, New Mountain Capital shareholders, and Blackstone have now agreed to the deal. The Blue Yonder brand will be retained but will function under the Panasonic Connected Solutions Company umbrella, led by chief executive Yasuyuki Higuchi. 

The deal is expected to close in the second half of 2021 subject to regulatory approval. 

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