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E2open CEO Michael Farlekas said his company’s supply chain solutions platform will be enhanced with more capabilities such as logistics execution software via its acquisition of BluJay Solutions.
The planned $1.7 billion transaction, announced May 27, is intended to provide increased value for customers as well as unlock more opportunities to accelerate long-term growth. Austin, Texas-based E2open will combine its end-to-end platform and trading partner network with the transportation management software and global trade capabilities provided by BluJay.
“We have a very small TMS today,” Farlekas said in an interview with Transport Topics on June 2. “So it just dramatically increases our capability in terms of transportation management. And the other thing it brings is a network.”
E2open is a network-based provider of a cloud-based and end-to-end supply chain management platform. BluJay Solutions is a cloud-based logistics execution platform that provides solutions for shippers, logistics service providers and freight forwarders. That includes a suite of logistics execution applications and a trade network of more than 50,000 participants serving over 5,700 global customers.
“We are very excited about joining forces with E2open in this highly strategic combination,” BluJay CEO Andrew Kirkwood said in a statement May 27. “Together, we will deliver a more powerful supply chain software platform built upon the world’s largest global trade network.”
When acquiring a business, Farlekas noted that his company does so for one main reason: It will provide a better service for customers as one operating platform. The potential acquisition must be mission-critical, meaning customers rely on their solutions. They have to have adjacency, meaning the solutions the company provides could be integrated. They also have to have complementary capabilities.
“We see a large convergence happening between our core business, which is planning and collaboration from end-to-end and also the logistics, or execution, part of the supply chain,” Farlekas said. “The TMS is right in the middle because if you put yourself squarely in a brand owner’s perspective or manufacturer’s perspective, they have transportation in all phases of that process.”
BluJay will be fully dissolved into the company and its services integrated into the larger operating platform. Its employees and leadership are coming over as well. Some BluJay executives will even be getting positions on the company board. BluJay shareholders will hold approximately 22% pro forma ownership of E2open after the consummation of the transaction.
“We integrate companies,” Farlekas said. “We don’t make them stand alone. We don’t operate them independently. Our entire value proposition is around combining applications from the end-to-end supply chain into one cohesive process. So we’ll have one go-to-market for the entire company.
“We’ll have one way of operating for the entire company. We’ll have one brand for the entire company. We’ll have one solution platform that natively works together.”
— E2open (@E2open) May 27, 2021
E2open will acquire BluJay Solutions for an aggregate of 72.4 million shares of Class A common stock and $760 million cash pursuant to the purchase agreement. This includes repayment of debts and is subject to adjustments for certain items. E2open said that based on the price of its common stock as of May 25, the stock-and cash-transaction is valued at $1.7 billion. The final transaction value will change based on fluctuations in…