E2open Parent Holdings Inc. (NYSE:ETWO), a global cloud-based supply chain management platform based in Austin, Texas, announced Thursday it plans to acquire the Holland, Michigan-based logistics execution platform BluJay Solution. The deal could be valued at $1.7 billion, consisting of $760 million in cash and 72.4 million shares, giving BluJay shareholders approximately 22% ownership of the combined company.
BluJay’s current shareholders, Francisco Partners and Temasek, will be able to appoint one director each to the E2open board once the transaction is complete.
The deal is expected to close in the third quarter.
BluJay’s execution software connects a network of 50,000 capacity partners and serves more than 5,700 global customers, including 20 of the top 25 global logistics service providers (LSPs). The acquisition will allow E2open to leverage BluJay’s direct-to-customer offerings globally, including over-the-road trucking, last mile, parcel and the rail network that will soon be acquired from Raven Logistics, a provider of railroad SaaS solutions in North America.
“I am thrilled to welcome the exceptional team and great customers of BluJay Solutions to E2open,” said Michael Farlekas, president and CEO at E2open. “Combining E2open’s end-to-end platform and large trading partner network with BluJay’s leading logistics execution software, we will provide more robust capabilities and value to our customers, unlocking a greater opportunity to accelerate our long-term growth. This transformative acquisition advances our strategy and is consistent with our approach to M&A over the last five years.”
This acquisition is consistent with E2open’s four specific levers that have been set to reach a growth rate of 10% in the fiscal year of 2023. In the company’s recent fiscal year earnings call, Farlekas described the areas the company was focused on improving to reach these goals.
“[We will] increase our distribution through building strategic partnerships; identify new value drivers by leveraging our network and our data; improve the packaging and pricing of our solutions to increase sales velocity; [and] build a new logo sales team to augment our current go-to-market strategy focused on existing clients,” he said.
“We are ahead of plan on all four initiatives. We have set up our new logo sales team with the addition of eight quota carrying reps and the requisite management and presales teams. We previously announced two partnerships, one was Dun & Bradstreet and the other was Maersk, and we have three more partnerships in our pipeline.”
Both companies have been highlighted in Gartner’s Magic Quadrant for Transportation Management Systems for being challengers in the multimodal domestic TMS space.
The companies’ critiques were complementary to each other. BluJay’s solutions are optimal for mode conversion, load consolidation and tracking asset capacity, areas of service that E2 is looking to improve. E2open systems have been successful in the European and APAC regions, an area that BluJay struggles to compete with its competitors, Gartner said.
The acquisition aims to combine the two powerful solutions and push them into the Leaders category, competing with solutions like Oracle, Blue Yonder and SAP, which have been placed there for their ability to execute their innovative visions.
“The combination of E2open and BluJay is a natural next step for both businesses, creating a combined company with leading capabilities from planning through execution,” said Deep Shah, co-president at Francisco Partners. “The fit between our respective product offerings, shared vision for the future of the industry and alignment on core values makes for a combined future that we are very excited to be a part of through our substantial equity consideration in the combination.”
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