PG Procter and Gamble Co

By Jennifer Smith 

Coupa Software Inc. is buying supply-chain planning company Llamasoft Inc. for roughly $1.5 billion, as the pandemic brings greater attention to technology that helps businesses make operations from raw materials sourcing to distribution more resilient.

The acquisition expands the supply-chain capabilities of San Mateo, Calif.-based Coupa, whose cloud-based enterprise software helps companies manage their business spending. The deal, which Coupa expects to close Monday, will give customers such as BMW Group AG, Airbus SE and Procter & Gamble Co. access to Llamasoft's artificial intelligence-powered technology.

Llamasoft's software helps companies model, design and optimize their supply-chain networks, using AI and algorithms to map out scenarios and mitigate potential risks. The Ann Arbor, Mich., company is backed by private-equity fund TPG Capital, which took a stake in 2017, and counts Boeing Co., Danone SA and Home Depot Inc. among its customers.

This is Coupa's third acquisition this year. The company's platform helps businesses manage procurement, invoicing, payments, sourcing and other spending functions and has more than $1.95 trillion in cumulative spending by its customers under management.

"We've pulled all these siloed processes together," Coupa CEO Rob Bernshteyn said. "We're like Salesforce, but on the supply-chain management side of the house."

The deal, over time, will give Coupa's customers the ability to redesign and plan their supply chains through Llamasoft's software, and allow Llamasoft's clients to execute supply-chain decisions and manage supplier relationships through Coupa's platform, which has a network of more than 5 million suppliers.

Events this year, including shortages of goods from household staples to industrial components, amid coronavirus-driven lockdowns, demonstrated that businesses must be able to respond quickly to supply volatility and shifting demand, Mr. Bernshteyn said. "Supply chains need to be sorted out in 2021 and 2022, and we want to be a strategic partner to the companies," he said.

The turmoil in supply chains is drawing more investment in software and technology that can help companies minimize risks and build in backstops, such as holding additional inventory or adding suppliers in different locations.

Supply-chain software provider E2open LLC said last month it plans to go public through a merger with a blank-check company that would value E2open at about $2.57 billion. In April, private-equity firm KKR & Co. invested $100 million in o9 Solutions Inc., valuing the cloud-based supply-chain management software maker at more than $1 billion.

Write to Jennifer Smith at jennifer.smith@wsj.com

(END) Dow Jones Newswires

November 02, 2020 09:34 ET (14:34 GMT)

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