The second time was the charm for JDA Software, which today closed its acquisition of fellow supply chain software specialist i2 Technologies, 13 months after its initial takeover bid failed.
The final transaction cost was $604 million, according to a company statement, or $19.79 per share. The deal combines two best-of-breed supply chain planning and management companies that had battled in the marketplace for years. JDA said the streamlined company would boast 6,000 customers worldwide, including discrete and process manufacturers, wholesale distribution and transportation companies, and retailers and service providers.
JDA chief executive Hamish Brewer characterized the tie-up as an “exciting milestone for JDA,” adding that i2 “doubles JDA’s market for advanced planning and optimization solutions in all targeted manufacturing verticals, enabling us to address the complexities of discrete manufacturing [and] complement our leadership in process manufacturing.” He also said in the statement that i2 would help bolster JDA’s presence in Tier 1 and Tier 2 markets, though he did not call out specific markets.
JDA has yet to detail its plans for supporting and integrating i2’s products and customers. A spokeswoman today said, “We are doing a thorough evaluation of our product suites and intend to publish a detailed product roadmap as soon as possible.”
JDA retained two i2 executives, naming Aditya Srivastava its senior vice president and chief technology officer and Kelly Thomas senior vice president, manufacturing. Asked today whether those were the only members of the i2 management team to make the transition to JDA, the spokeswoman referred to a webpage detailing JDA’s executive lineup. The page does not include Jackson Wilson, i2’s CEO.
Founded in 1988 by Sanjiv Sidhu and Ken Sharma in Dallas, i2 was originally known as Intellection before being renamed i2 Technologies. The company was a pioneer in the development of supply chain software and grew rapidly, hitting $1 billion in revenue in 2000. That year, i2 made software industry history by announcing the largest merger ever in that industry, the $9.3 billion acquisition of Aspect Development, a provider of decision support sourcing, product development and MRO products. But i2 eventually fell on hard times due to increased competition, management upheaval, and a changing supply chain market. These and other factors led to the acquisition by JDA.
JDA goes into the merger on the wings of a solid fourth quarter, which the company reported earlier this week. Revenue in the three months ended Dec. 31, 2009, totaled $107.1 million, a fourth-quarter record and a 1% improvement on the $106.2 million reported in Q4 of 2008. That tally was bolstered by JDA’s signing of 10 fourth-quarter deals worth in excess of $1 million each.
The company turned the brisk sales into net income of $8.5 million, reversing a year-earlier loss of $13.5 million caused mainly by a $25 million fee JDA paid to i2 when it could not consummate its first takeover offer.
The bustling fourth quarter helped temper JDA’s revenue slide for the year, as sales inched down less than 2% to $385.8 million. Net income grew significantly, to $26.3 million from $3.1 million in the prior year.
“With the industry experiencing a solid holiday period, we look forward to carrying that momentum into 2010,” Brewer said in announcing the results.