labels: M&A
Retail software maker JDA acquires i2 Technologies for $346 million news
11 August 2008

JDA Software Group Inc., which makes software for retailers and manufacturers, said today it would acquire Dallas-based i2 Technologies Inc., which makes supply-chain management software, for $346 million in cash.

Scottsdale, Arizona-based JDA said the acquisition adds discrete manufacturing to its manufacturing offerings and strengthens its retail and transportation management presence.

It expects to save $20 million annually on the deal and costs are expected to be about $45 million.

JDA will pay $14.86 for each share of i2, a 4.9 per cent premium to i2's closing price Friday. The stock has rallied 40 per cent the past four months.

If i2 or JDA terminates the deal under certain circumstances, i2 will be required to pay JDA a non-refundable termination fee of $15 million or JDA will be required to pay i2 a nonrefundable termination fee of $20 million.

To finance the deal JDA received commitments from Credit Suisse and Credit Suisse Securities LLC, Wachovia Bank, National Association and Wachovia Capital Markets for up to $450 million of debt financing, including $425 million in term loans and a $25 million revolving credit facility.

JDA CEO Hamish Brewer said the deal would double its manufacturing presence to include discrete ones. Discrete manufacturing, commonly used among computer products, entails the just-in-time method of building items.

"In an industry that continues to consolidate, scale matters. In that regard, the combination of these two companies will create one of the world's strongest, best-of-breed software solution providers focused on the global supply chain," commented Dr. Pallab Chatterjee, CEO of i2.

"The combination of i2 and JDA increases the opportunity for expanded expertise, accelerated innovation and even greater value delivery through the joining of some of the best solutions and brightest minds in the industry," he added.

JDA has posted lower net income so far this year on falling license and software revenues. JDA will finance the deal with debt, JDA Chief Financial Officer Kristen Magnuson said, noting doing so will help the company avoid equity dilution and maximize shareholder value.

Consummation of the Merger, which is expected to close in fourth quarter 2008, is subject to several closing conditions, including the approval and adoption of the merger agreement by i2's stockholders, the amendment of i2's convertible note indenture, expiration or termination of the applicable Hart-Scott-Rodino waiting periods and regulatory and other customary conditions.


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Retail software maker JDA acquires i2 Technologies for $346 million