Above the Fold: Supply Chain Logistics News (April 23, 2021)

Nothing says “I love you” like a new sofa.

At least that’s what my wife and I told each other when we bought ourselves a new sofa for Valentine’s Day this past February. 

It’s a very comfortable sofa. At least that’s what we remember from the showroom; ours hasn’t arrived yet. The delivery date has been pushed out yet again; it’s now sometime between June 20 and July 11. 

Nothing says “I love you” like new rain gutters.

At least that’s what my wife and I are telling each other, thinking ahead to our wedding anniversary, as we watch the rain spill over the gutters from our worn-out couch.

In this week’s supply chain and logistics news:

Panasonic is Indeed Acquiring Blue Yonder

A few weeks ago, news leaked that Panasonic was in the process of acquiring Blue Yonder, but neither party confirmed it. Then two weeks ago, Blue Yonder announced that “it confidentially submitted a draft Registration Statement on Form S-1 to the Securities and Exchange Commission (the “SEC”) relating to the proposed initial public offering of its common stock.” And now this morning, the original news was confirmed: Panasonic is acquiring Blue Yonder. Here are some excerpts from the press release:

Panasonic will purchase the remaining 80% of shares (for USD5.6 billion) of Blue Yonder, adding to the 20% which Panasonic acquired in July 2020. Including repayment of outstanding debt the additional investment totals USD7.1 billion, valuing Blue Yonder at USD8.5 billion. 

This acquisition strengthens Panasonic’s portfolio and accelerates the companies’ shared Autonomous Supply Chain mission, empowering customers to optimize their supply chains using the combined power of AI/ML and IoT and edge devices. By unifying supply, demand and commerce solutions with IoT and edge technologies, companies can better utilize predictive business insights to pivot their operations in real-time.

Yasuyuki Higuchi is the CEO of Panasonic’s Connected Solutions Company (to become Panasonic Connect Co., Ltd. on April 1, 2022) which leads this business area. Blue Yonder CEO Girish Rishi and the extended leadership team will join the new organization and the Blue Yonder brand will be retained and business will function within the Panasonic Connected Solutions Company umbrella.

(Side bar: Artificial Intelligence. Machine Learning. IoT. Edge. Autonomous. Predictive. That’s a lot of buzzwords in one press release!)

I don’t know too much about Panasonic to comment about the merits of this acquisition. Generally speaking, however, the success of these types of acquisitions often boil down to cultural and organizational fit. There have been examples over the years where the vision and synergies expressed in the press release never fully materialize (see 3M’s acquisition of HighJump and Bramble’s acquisition of LeanLogistics; in both cases, the acquired companies were ultimately spun off again). Of course, every case is different, and in this case, Panasonic and Blue Yonder have a history working together, first with Panasonic as a Blue Yonder customer and then as joint venture partners.

What’s clear is that investors of all types, across all geographic regions, are very interested in supply chain technology providers (both hardware and software), as well as service providers.

For example, as linked above, China-based Meituan “has raised $10 billion in a stock and convertible bonds sale…The Tencent-backed firm with a market valuation of $220 billion said it plans to use its new warchest to invest in autonomous delivery vehicles, delivery drones and other cutting-edge technology.”

Another example, although pocket change in comparison, is Torch which recently announced the close of a $3.5 million seed round led by Maersk Growth. Here’s an excerpt from the press release:

“The pandemic has accelerated the already growing demand for reliable short-haul capacity, and stretched the boundaries of supply chain networks,” said Torch CEO and Founder Abtin Hamidi. “Over the past decade, the average length of haul has decreased by more than 30% due to e-commerce and the dynamics of retail, CPG and other shippers. The majority of the truckload transactions are now considered short-haul, yet there are very few reliable, consistent options for shippers that are founded in digital principles.”

Simply put, supply chain and logistics is a good place to be today for technology and services companies, their employees, and investors.

And with that, have a happy weekend!

Song of the Week: “Shy Away” by Twenty One Pilots