Panasonic Holdings Corp. announced on Wednesday its intention to spin off its supply chain management (SCM) business through an initial public offering.
The new company, should the IPO be consummated, will be centered around Blue Yonder, the U.S-based software-as-a-service company that Osaka, Japan-based Panasonic purchased last year for more than $7 billion. In a statement, Panasonic said it has not made a final decision as to a listing and on which exchange the IPO should go forward.
Panasonic (OTC: PCRFY) reworked its business into a holding company earlier this spring.
“With the introduction of the operating company system, the Panasonic Group aims to strengthen its competitiveness by enabling each operating company to act more independently and to thoroughly implement autonomous management,” the company said in the statement. “Following, it was decided that based on the business characteristics and market environment, a stock exchange listing of the SCM business would be the optimal way to accelerate growth globally by utilizing the capital markets.”
Blue Yonder the centerpiece
Blue Yonder’s AI-driven technology would be the centerpiece of an SCM business, but Panasonic said it would also leverage its Panasonic Connect businesses including Gemba Solutions Co. and the technology research and development division, among others. The ultimate goal would be to “drive the companies’ vision to deliver the autonomous supply chain to the edge.”
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Read: Panasonic acquires Blue Yonder for $7.1B
Read: Rishi, who sold Blue Yonder to Panasonic, stepping down as CEO
“In recent years, the external environment surrounding the supply chain has been changing significantly and is becoming more complex due to recent geopolitical uncertainty, the pandemic, and changes in consumer behavior. Moreover, as the expected needs of enterprises for supply chain management solutions are increasing, and its market is expected to expand rapidly, competition for strengthening of R&D and investing in M&A have become more fierce in this field,” Panasonic’s statement read.
The company said, should a listing take place, the new company would look to reinvest proceeds from the IPO to expand through investments in M&A and digital supply chain R&D.
Panasonic would maintain a majority stake in the new business.
Watch: Blue Yonder’s impact on supply chains
Yuki Kusumi, CEO of Panasonic Holdings, told Asian media the supply chain management requires “timely management decisions.” The new business would include Panasonic’s sensors and robotics solutions in addition to Blue Yonder’s SaaS platform.
According to Nikkei Asia, analysts believe the new company’s valuation could reach $7.7 billion.
Panasonic profits rise
Panasonic reported on Wednesday that net profit rose 55% for its fiscal year ending in March. Blue Yonder in February announced its 2021 annualized recurring revenue was $475 million, up 39% from the prior year, and SaaS revenue increased 44% to $108 million in Q4. Subscription revenue was 69% of total revenue in the fourth quarter and for all of 2021. In the earnings release, Blue Yonder said total annual revenue was more than $1.1 billion, and its SaaS backlog was in excess of $1 billion.
In that same February earnings release, the company announced that Girish Rishi had stepped down as CEO of Blue Yonder. Rishi, who joined the company in 2017, was replaced on an interim basis by Mark Morgan.
Blue Yonder has approximately 5,500 employees globally.
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