(Bloomberg) -- Panasonic Corp. has agreed to take over U.S. artificial intelligence software developer Blue Yonder for $7.1 billion in one of the biggest acquisitions for the Japanese firm.
Panasonic, which already has a 20% stake in Blue Yonder, will buy the rest of the AI firm's shares from New Mountain Capital and funds managed by Blackstone Group Inc. for $5.6 billion, according to a statement on Friday, confirming an earlier Bloomberg News report. Including repayment of outstanding debt, Panasonic's total investment will amount to $7.1 billion.
The announcement came less than a year after Panasonic acquired the minority stake in Blue Yonder for $800 million, giving the AI firm an enterprise value of $5.5 billion. Panasonic's latest buyout offer will value the Scottsdale, Arizona-based company at $8.5 billion.
The Japanese firm will fund the transaction with cash as well as a bridge loan. The deal is expected to close by the end of this year.
Shares in Panasonic on Friday plunged and touched their lowest level since Jan. 18 in Tokyo after the Bloomberg News report. The stock fell 3.5% at the close.
”It's a good direction for Panasonic, to target the U.S. market,” said Bloomberg Intelligence analyst Masahiro Wakasugi. But the valuation “is not cheap and we will have to wait to see how they fare after the merger to evaluate it.”
Blue Yonder, founded in 1985 and formerly known as JDA Software Inc., makes supply-chain management software and uses artificial intelligence to predict product demand. Its revenue was more than $1 billion last year, according to the statement. It counts Best Buy Co., Coca-Cola Co. and Walmart Inc. among its over 3,000 customers globally.
Panasonic's buyout offer will see Blue Yonder scrapping its listing plans. The AI firm this month confidentially filed for a U.S. initial public offering.
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