JDA to Acquire i2
August 11, 2008 - JDA Software Group Inc. signs a definitive merger agreement to acquire i2 Technologies Inc., a global provider of supply chain solutions, for an enterprise value of approximately $346 million in cash.
While JDA has historically focused on the retail industry, this latest move -- along with its purchase of Manugistics in 2006 and nine other acquisitions in 10 years -- is expected to further strengthen its position in the global consumer goods market for supply chain planning and optimization solutions. On a pro-forma trailing 12-month basis, the combined company has annual revenues of $635 million, including nearly $300 million of annual maintenance and recurring subscription fees.
According to JDA Chief Executive Officer Hamish Brewer, "By acquiring i2 we double our addressable market in manufacturing to include discrete manufacturing, complementing our current market leadership in process manufacturing and strengthening our retail and transportation management presence. With the experience gained from the successful acquisition of Manugistics in 2006, the addition of i2 is comparatively an incremental and logical step for JDA," comments Brewer.
In order to avoid equity dilution and maximize our shareholder value, JDA will finance the acquisition using debt. Credit Suisse and Wachovia will be financing the deal. Under the terms of the merger agreement, each issued and outstanding share of i2's common stock will be converted into the right to receive $14.86 per share in cash, and each issued and outstanding share of i2's Series B Convertible Preferred Stock will be converted into the right to receive $1,095.3679 per share in cash plus all accrued and unpaid dividends. In addition, upon consummation of the merger, the vesting of each outstanding option and restricted stock award for common stock of i2 will accelerate in full and the holders of such equity awards will be entitled to receive $14.86 per share less the exercise price of such equity awards, if any. Direct costs of the acquisition are currently estimated to be $45 million and include OID and debt issuance costs, investment banker fees, legal costs and change-in-control payments.
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, and regulatory and other customary conditions. It will also be necessary to complete JDA's debt financing arrangements prior to completing the proposed merger. There can be no assurance that the merger will be consummated. If i2 or JDA terminates the transaction 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.
According to JDA Chief Executive Officer Hamish Brewer, "By acquiring i2 we double our addressable market in manufacturing to include discrete manufacturing, complementing our current market leadership in process manufacturing and strengthening our retail and transportation management presence. With the experience gained from the successful acquisition of Manugistics in 2006, the addition of i2 is comparatively an incremental and logical step for JDA," comments Brewer.
In order to avoid equity dilution and maximize our shareholder value, JDA will finance the acquisition using debt. Credit Suisse and Wachovia will be financing the deal. Under the terms of the merger agreement, each issued and outstanding share of i2's common stock will be converted into the right to receive $14.86 per share in cash, and each issued and outstanding share of i2's Series B Convertible Preferred Stock will be converted into the right to receive $1,095.3679 per share in cash plus all accrued and unpaid dividends. In addition, upon consummation of the merger, the vesting of each outstanding option and restricted stock award for common stock of i2 will accelerate in full and the holders of such equity awards will be entitled to receive $14.86 per share less the exercise price of such equity awards, if any. Direct costs of the acquisition are currently estimated to be $45 million and include OID and debt issuance costs, investment banker fees, legal costs and change-in-control payments.
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, and regulatory and other customary conditions. It will also be necessary to complete JDA's debt financing arrangements prior to completing the proposed merger. There can be no assurance that the merger will be consummated. If i2 or JDA terminates the transaction 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.