Supply sustainability: Panasonic acquires Blue Yonder in $7.1bn deal

BY Fraser Tennant

In a move designed to deliver new cloud capabilities, innovate global supply chains and create a more sustainable world,  Japanese multinational electronics company Panasonic Corporation is to acquire US software and consultancy company Blue Yonder in a transaction valued at $1.7bn.

The acquisition sees Panasonic purchase the remaining 80 percent of shares of Blue Yonder, adding to the 20 percent it acquired in July 2020. It builds on a strategic relationship, established in January 2019 with a partnership, followed by the creation of a joint venture company in Japan in November 2019.

Moreover, the purchase of Blue Yonder enhances Panasonic’s digital transformation and customer-centric focus. To this end, on 1 April 2022, the company plans to shift to a holding company system concentrating management resources on strategic businesses in key areas such as providing supply chain innovation and automation.

“I am happy to welcome Blue Yonder and its associates to the Panasonic Group,” said  Yuki Kusumi, chief executive of Panasonic. “By merging the two companies, we would like to realise a world where waste is autonomously eliminated from all supply chain operations and the cycle of sustainable improvement continues.”

Over the past year, the need for more intelligent, autonomous and edge-aware supply chains has been dramatically heightened by the coronavirus (COVID-19) pandemic, the rise of e-commerce and the proliferation of data.

“There are still many such losses and stagnation in supply chain operations,” added Mr Kusumi. “So, through the drastic reduction of wasted labour and resources, we would like to provide better ways of working, and contribute to customers’ management reform and also to the realisation of a sustainable society by carefully using limited global resources.”

Together, Panasonic and Blue Yonder intend to deliver a unique competitive advantage for customers to drive more automation and actionable, real-time business insights that reduce waste and improve operations, while creating a more sustainable world.

“I am thrilled that Blue Yonder is joining Panasonic,” said Girish Rishi, chief executive of Blue Yonder. “We have developed mutual trust and have a shared vision for an autonomous supply chain that delivers a better life and a better world.”

Approved by the boards of directors of both Panasonic and Blue Yonder, the acquisition is expected to close by the second half of 2021, subject to receipt of customary regulatory approvals.

News: Panasonic to buy U.S. supply-chain software firm Blue Yonder for $7.1 bln

Madison highlights air quality with $3.6bn acquisition of Nortek

BY Fraser Tennant

In a $3.6bn deal it claims highlights “the importance of indoor air quality”, Madison Industries, one of the world’s largest privately held companies, is to acquire heating, ventilation and air conditioning manufacturer Nortek Air Solutions from engineering group Melrose Industries.

The acquisition of Nortek brands, including Broan, NuTone, Reznor, StatePoint, Zephyr and Huntair, positions Chicago-based Madison to better serve its customers by providing a full suite of air hygiene solutions to improve indoor air quality for the health and longevity of building occupants.

The Ergotron and Nortek Control businesses, which also form part of the Nortek group, remain under Melrose’s ownership.

“The global pandemic has put a spotlight on the importance of indoor air quality,” said Larry Gies, founder of Madison. “Nortek perfectly complements our portfolio of companies that provide solutions to improve the quality of indoor air. Our mission is to make the world safer, healthier and more productive and the addition of Nortek Air with its 6000 passionate employees allows us to deliver even more of that mission.”

Acquired in 2016 for $2.8bn, Nortek is Melrose’s third largest division by revenue. The British firm initially explored the potential sale of its temperature control business in March 2020, a process delayed by coronavirus (COVID-19) lockdown restrictions. 

“Our strategy of ‘buy, improve, sell’ remains the same but circumstances evolve,” said Simon Peckham, chief executive of Melrose. “Our businesses are all responding to the demands of climate change, driven by customers and consumers. Our air management executive team has created a business from scratch with exemplary environmental credentials which will make a real difference to energy and water consumption in its market. We can now hand that technology to a high quality buyer with specialist aspirations and skills.”

The acquisition is expected to be completed in the second or third quarter of 2021 and is conditional upon, among other things, shareholder approval.

Mr Gies concluded: “The Madison team is committed to improving indoor air quality and delivering solutions that provide healthy air for its customers.”

News: UK's Melrose to sell Nortek Air Management unit for about $3.63 bln

Blackstone Group sells portfolio for $2.9bn

BY Richard Summerfield

Blackstone Group has agreed to sell its portfolio of warehouse and logistics assets in Australia to ESR Cayman Ltd in a deal worth $2.9bn.

ESR, a Hong Kong-listed property manager, has partnered with Singaporean sovereign wealth fund GIC Pte Ltd to acquire the portfolio. GIC will contribute 80 percent of the required equity for the deal, with ESR providing the rest. The portfolio consists of 45 assets held by Blackstone’s Milestone Logistics across major cities including Adelaide, Brisbane, Melbourne, Perth and Sydney, covering a total land area of 3.6 million square metres.

The deal, which is expected to provide an initial yield of 4.5 percent with a 6.9-year weighted average lease expiry, is the largest logistics and general property portfolio transaction in Australia to date. Upon completion, ESR will be the third-biggest logistics landlord in the country with assets under management increasing to A$7.9bn.

The potential sale of the portfolio has been under discussion for some time. In January, Blackstone received more than 10 first-round bids for Milestone Logistics. The firm also considered an initial public offering (IPO) for the portfolio.

“The opportunity to secure such a large portfolio with extremely well-located assets across Adelaide, Brisbane, Melbourne, Perth and Sydney, strategically positions EMP to benefit from the continued growth in demand for warehouse space, particularly as the robust demand for logistics real estate is expected to remain strong due to sustained growth in e-commerce,” said Phil Pearce, chief executive of ESR Australia.

“We are extremely pleased to deepen our partnership with GIC with this momentous transaction,” said Jeffrey Shen and Stuart Gibson, co-founders and group co-chief executives of ESG. “The acquisition of the Milestone portfolio is a significant leap forward for ESR. This tremendous expansion not only adds immediate scale to our presence in Australia and the region, but also extends our footprint and reaffirms our commitment to one of our highest conviction markets in Asia Pacific.”

GIC and ESR are no strangers to one another. In December 2020, the firms announced a strategic partnership to establish a $750m joint venture to develop and acquire industrial and logistics assets in India.

News: ESR, GIC to buy Australian logistics property portfolio from Blackstone for $2.9 bln

Public Storage strikes $1.8bn ezStorage deal

BY Richard Summerfield

Public Storage Inc., a self-storage real estate investment trust (REIT) and third-party management firm, has agreed to acquire its smaller rival ezStorage for $1.8bn.

The deal, which is expected to close in May 2021, will see Public Storage acquire California-based ezStorage and its 48 properties, which comprise 4.2 million net rentable square feet across Washington, DC, Virginia and Maryland. The company will fund the transaction with unsecured debt and expects it to be immediately accretive to funds from operations (FFO).

“We are pleased to welcome the ezStorage customers to Public Storage’s industry-leading brand and platform,” said Joe Russell, chief executive of Public Storage. “The acquisition is a direct reflection of Public Storage’s unique positioning for growth through acquisitions, development, redevelopment, and third-party management.”

“We thank the Manganaro family and the ezStorage team for their integrity through our long-standing relationship,” said Mike McGowan, senior vice president of acquisitions at Public Storage. “Their properties reflect unparalleled local-market knowledge and a focus on location and property quality. Looking ahead, we see a wide range of opportunities to acquire and develop properties in desirable markets as part of Public Storage’s broader growth initiatives.”

Public Storage has interests in 2548 self-storage facilities in 38 states across the US, with approximately 175 million net of rentable square feet. The company also holds a 35 percent interest in Shurgard Self Storage SA, which has 241 facilities in seven European countries, with approximately 13 million net rentable square feet.

Public Storage has been particularly active in the M&A market in recent years. Since 2019, the company expanded its net rentable square feet by 13 percent, or about 21 million net rentable square feet, through $4.1bn in acquisitions, development and expansions, not including the deal for ezStorage.              

Under the terms of the deal, Public Storage will take over responsibility of one property still under construction and intends to expand eight existing ezStorage locations. Those projects will increase the portfolio’s square footage by 10 percent throughout 2023, the company announced.

News: Public Storage acquires rival ezStorage for $1.8 billion

Over 1.4 billion to use facial recognition for payments by 2025, claims new report

BY Fraser Tennant

The number of users of software-based facial recognition to secure payments will exceed 1.4 billion globally by 2025, from just 671 million in 2020, according to a new study by Juniper Research.

The study, ‘Mobile Payment Authentication: Biometrics, Regulation & Market Forecasts 2021-2025’, states that this 120 percent growth demonstrates how widespread facial recognition has become – a rapid increase fuelled by its low barriers to entry, a front-facing camera and appropriate software.

Furthermore, the study identified the implementation of FaceID by Apple as accelerating the growth of the wider facial recognition market, despite the challenges to facial recognition during the coronavirus (COVID-19) pandemic with the use of face masks.

The study also recommends that facial recognition vendors implement robust and rapidly evolving artificial intelligence (AI)-based verification checks to ensure the validity of user identity, or risk losing user trust in the authentication method as spoofing attempts increase.

“Hardware-based facial recognition is growing, but the ability to carry out facial recognition via software is limiting its adoption rate,” said Susan Morrow, associate analyst at Juniper Research and co-author of the study. “As the need for a secure mobile authentication environment grows, smartphone vendors will need to increasingly turn to more robust hardware-based systems to keep pace with fraudsters’ evolving tactics.”

The Juniper study also found that the use of voice recognition for payments is increasing, from 111 million users in 2020, to over 704 million expected in 2025. The study identified that, at present, voice recognition is mostly used in banking, and will struggle to grow beyond this, due to concerns around robustness.

Juniper Research recommends that vendors adopt a multi-method biometric strategy, encompassing facial recognition, fingerprints, voice and behavioural indicators to ensure a secure payment environment.

Report: Mobile Payment Authentication: Biometrics, Regulation & Forecasts 2021-2025