JDA makes second play to buy I2 Technologies
Is second time the charm for supply chain software mega-deal?
Dave Hannon -- Purchasing, 11/10/2009 10:39:13 AM
WHAT DO YOU THINK?
A little over a year ago, JDA Software announced it was buying supply chain software provider i2 Technologies, which market watchers said would dovetail nicely with JDA's prior acquisition of Manugistics. But there was no dovetailing.
Quietly, in December 2008, the deal fell through in the midst of the worst M&A market in decades. While neither JDA nor i2 officials provided many details on why the deal fell through, according to some reports, the deal fell through because JDA tried to renegotiate based on credit markets, while others say the buyer just need more time. I2 CEO Pallab Chatterjee left the company only days after the deal was terminated.
Flash forward a year to last week, when JDA announced it has cut another deal to buy i2, this time for a more hefty $396 million. According to a presentation on the deal, it offers cross selling opportunities, specifically selling i2 in JDA's retail base and selling JDA into i2's discrete manufacturing customer base. The companies also said there is roughly $20 million worth of cost synergies available, mostly through headcount reduction and "public company costs."
But the deal does not sit well with at least some shareholders. Several possible shareholder law suits are brewing. One law firm says its investigation "concerns whether the i2 Board of Directors have breached their fiduciary duties to stockholders by failing to adequately shop the company before entering into this transaction and whether JDA is underpaying for i2 shares, thus unlawfully harming i2 stockholders."
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