M&A in Supply Chain & Logistics

m&a Mar 2, 2025 8:48:05 AM SCL Investor 7 min read

The supply chain and logistics technology sector is undergoing a seismic transformation, driven by global disruptions, shifting economic priorities, and a growing reliance on digital solutions. Investors and M&A activity have surged as companies seek innovative ways to optimize operations, mitigate risks, and enhance resilience. With the supply chain management (SCM) software market set to double to $62 billion by 2028, according to ICON Corporate Finance, the sector presents significant opportunities for growth and consolidation.

Market Trends Driving Investment in Supply Chain Technology

Recent disruptions, from the COVID-19 pandemic to geopolitical tensions and trade barriers, have exposed the vulnerabilities of global supply chains. Companies are now prioritizing technology investments to build more robust, transparent, and flexible supply chain ecosystems. Several key trends are shaping investment strategies in this space:

The Rise of AI and Automation

Artificial intelligence (AI) and machine learning (ML) are playing an increasingly pivotal role in supply chain management. Companies are integrating AI-driven analytics for real-time decision-making, optimizing demand forecasting, inventory management, and transportation logistics. Warehouse automation, robotics, and autonomous vehicle solutions are also gaining traction, leading to heightened investor interest. According to Deloitte’s 2025 Manufacturing Industry Outlook, 55% of surveyed industrial product manufacturers are leveraging AI tools, with over 40% planning to increase investments in AI and ML over the next three years.

Cloud-Based SCM Software Adoption

With the need for seamless data integration and visibility across supply chain networks, businesses are transitioning to cloud-based SCM solutions. These platforms provide real-time tracking, predictive analytics, and enhanced collaboration among stakeholders, making them a key focus for investment and M&A activity. Gartner reports that over 50% of businesses have adopted logistics and SCM software in the past two years to remain competitive in the rapidly changing landscape.

Sustainability and ESG Compliance

Environmental, Social, and Governance (ESG) considerations are becoming essential in supply chain operations. Stricter regulations, such as the EU Corporate Sustainability Due Diligence Directive and the U.S. Conflict Minerals Provision, are driving companies to embed sustainability measures into their supply chain technologies. Blockchain-enabled traceability, carbon footprint tracking, and automated compliance audits are now integral features attracting investor interest. Blackstone’s significant investment in UK warehouses, totaling £1 billion in 2024, underscores the growing importance of logistics infrastructure.

The Growth of Transport and Warehouse Management Systems

Transport Management Systems (TMS) and Warehouse Management Systems (WMS) are experiencing rapid growth as companies seek to streamline operations and improve last-mile delivery efficiency. The European TMS market is expected to reach €2.1 billion, while the U.S. TMS market is projected at €2.3 billion by 2028, reflecting an annual growth rate of 12.1% and 11.7%, respectively. These figures highlight the increasing focus on logistics optimization and cost reduction.

M&A Activity: Consolidation and Strategic Acquisitions

Mergers and acquisitions (M&A) in the supply chain technology sector have been robust, with 141 SCM software deals completed in 2024 alone. Private equity (PE) firms and strategic acquirers are actively consolidating the fragmented landscape, focusing on high-growth niches such as AI-powered SCM solutions, end-to-end SaaS platforms, and automation-driven logistics software.

Key M&A Trends:

Strategic Consolidation: Major players are acquiring niche technology providers to enhance their SCM capabilities and expand their global reach. For example, Blue Yonder’s acquisition of last-mile logistics software firm Doddle and One Network Enterprise highlights a shift towards integrated SCM platforms.
Private Equity Backing: With PE firms accounting for 46% of SCM software deals in 2024, the sector remains highly attractive for buyouts and roll-ups. Vista Equity Partners’ acquisition of Jaggaer and Aptean’s acquisition of Logility exemplify this trend.
Public-to-Private Transactions: As undervalued SCM software firms face increasing pressure, private equity investors are capitalizing on opportunities to take companies private and enhance their value through technology innovation and operational efficiency. McKinsey reports that financial investors, including private equity, have over $2 trillion in dry powder, incentivizing increased M&A activity.

Future Outlook: What’s Next for Investors?

The supply chain and logistics technology market will continue to evolve, with several factors shaping its investment landscape:

AI and Robotics-Powered Logistics

The next wave of investment will focus on AI-driven supply chain automation, including robotics for warehouse operations, self-learning logistics algorithms, and AI-powered demand forecasting. Companies are expected to invest heavily in these technologies to gain a competitive advantage.

Enhanced Cybersecurity and Data Resilience

As SCM systems become increasingly digitized, cybersecurity investments will be crucial. Companies will prioritize secure, AI-enhanced platforms to mitigate cyber risks and ensure data integrity across their supply chain networks. Accenture notes that macroeconomic and political factors, combined with pent-up demand, create a complex yet promising environment for businesses seeking growth through M&A.

Vertical and Horizontal Expansion Strategies

M&A activity will likely expand across multiple sectors, with technology firms acquiring logistics companies and vice versa. We anticipate more partnerships between cloud-native SCM software providers and traditional logistics operators to create comprehensive supply chain ecosystems. KPMG’s M&A Outlook 2025 indicates that improved market conditions and favorable monetary policies will drive strategic expansions.

Expansion of Smart Logistics Hubs

With e-commerce growth fueling the need for faster deliveries, smart logistics hubs with integrated AI, IoT, and blockchain solutions will be a major investment focus. Automated fulfillment centers and drone-based last-mile delivery solutions will become more prevalent. BCG emphasizes the importance of diversifying sourcing strategies and investing in supply chain control towers to monitor and adapt to disruptions in real-time.

Conclusion

Investment and M&A in supply chain and logistics technology are set to remain buoyant, driven by technological advancements, increasing demand for resilience, and a dynamic regulatory environment. Companies that embrace digital transformation, automation, and sustainability will emerge as industry leaders, presenting lucrative opportunities for investors and acquirers alike. As the SCM sector continues to outperform the broader tech market, stakeholders should anticipate a wave of strategic consolidation and investment acceleration in the years ahead.

Sources:

Deloitte

https://www2.deloitte.com/us/en/insights/industry/manufacturing/manufacturing-industry-outlook.html

https://www.deloitte.com/global/en/about/press-room/tracking-the-trends-report-2025.html

https://www.deloitte.com/nl/en/services/financial-advisory/perspectives/mergers-and-acquisitions-deals-in-the-transport-and-logistics-industry.html

McKinsey

https://www.mckinsey.com/capabilities/m-and-a/our-insights/advanced-industries-new-technologies-and-supply-chain-shifts-are-driving-key-portfolio-and-investment-decisions

https://www.mckinsey.com/capabilities/m-and-a/our-insights/top-m-and-a-trends

https://www.mckinsey.com/capabilities/m-and-a/our-insights/travel-logistics-and-infrastructure-firms-are-finding-opportunities-in-technology-changing-consumer-demographics-and-global-trade

https://www.mckinsey.com/capabilities/m-and-a/our-insights/the-shifting-sands-of-m-and-a-in-transportation-and-logistics

Gartner

https://www.gartner.com/en/supply-chain/insights/beyond-supply-chain-blog/beyond-supply-chain-2025-predictions