On this Monday, the news cycle involving supply chain management topics is ever-increasing and the Supply Chain Matters blog will attempt to keep-up with helping readers to focus on the more important news of the week.
Supply chain planning applications technology provider Blue Yonder (formerly named JDA Software) has confidentially filed documentation with the U.S. Securities and Exchange Commission (SEC) for a proposed initial public offering (IPO) of stock ownership. The technology provider indicated that the exact number of shares and the price range for the potential offering have yet to be determined.
According to the company’s press release, the initial public offering is expected to take place after the SEC completes its review process, subject to market and other conditions.
In early March, Supply Chain Matters our alerted readers to a breaking news report from Nikkei Asia, which cited multiple sources familiar with the matter, reporting that Japan based high tech device producer Panasonic was set to acquire Blue Yonder for a reported sum of upwards of $6.5 billion. Nikkei reinforced in its reporting that the high-tech manufacturer was seeking to leverage its hardware manufacturing business by combing it with integrated software offerings, adopting a more recurring revenue business model, similar to other Japan based high tech companies such as Sony and Hitachi.
Panasonic currently holds a 20 percent stake in Blue Yonder, thus the news of a potential full acquisition did not seem all that surprising. That is up to now.
The Wall Street Journal reported on this development yesterday, which is uncharacteristic for such news to be published on a Sunday, especially when the Blue Yonder IPO statement came out on Thursday of last week. Blue Yonder is a major sponsor of The Wall Street Journal’s Logistics Report.
The obvious question is whether the Panasonic takeover is off the table.
We suspect, based on prior history of events, that this may or may not be the case. Only time will tell.
We state that because the private equity owners of Blue Yonder have garnered a reputation as tough and shrewd bargaining.
In August of 2016, Reuters exclusively reported that Honeywell International Inc was in talks to acquire the then JDA Software Group Inc, in a deal that valued the supply chain management software company at around $3 billion, including debt, which at the time was estimated to be upwards of $570 million. At the time, the deal featured a theme that Honeywell was looking to beef-up its sensing, productivity and automation solutions division with a full featured supply chain management software applications business. Once the report came out, the proposed deal turned into a back and forth of public statements which eventually ended after JDA was able to secure a structured financing deal from equity investment firm Blackstone Group.
Regarding Japanese industrial companies acquiring attractive software companies, Hitachi Ltd announced last week its acquisition of digital engineering firm GlobalLogic for a reported $9.6 billion. Similar to the initial reporting of Panasonic’s acquisition of Blue Yonder, the Hitachi deal represents the largest ever for Hitachi, a storied Japanese brand that has focused on electronics into a railway to electrical equipment. Reactions to the announcement focused on the perceived high price for the software company, but also from the attractiveness for a Japanese industrial giant garnering an internationally focused digital engineering and software business. The news of the Hitachi deal resulted in a 7 percent drop in the value of Hitachi’s stock.
Implications for Existing Customers
Once again, we advise Blue Yonder and/or JDA installed base customers or prospects to maintain a keen eye on ongoing developments. The focus should be on whether Blue Yonder indeed consummates its intended IPO, enriching its investors along with adding new investors to fuel added growth or whether Panasonic or a different suitor emerges before the IPO occurs.
Thus is the ongoing hot interest and associated dynamics in this year’s supply chain technology market.
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