Monday, 9 November 2009

JDA to acquire i2 Technologies

(By Philip Carnelley, 9 Nov 09, 09:30) Venerable mid-market ERP vendor JDA is to acquire supply-chain management company i2 Technologies for an enterprise value of $386m. (That’s the American i2, not the UK-based visual analysis firm). The merger adds i2's SCM software for discrete manufacturing to JDA's software for merchandising, supply chain planning and execution and revenue management. On a pro-forma basis, the combined company will have annual revenues of c$617 million, of which $400m is software licence and maintenance fees, from 6,000 customers worldwide. Both companies have an established customer base in the UK and we believe that combined UK revenues will be circa £16-20m.

The companies tried to merge a year ago but couldn’t agree on price. But the strategic rationale is strong. While Oracle and SAP have more or less sewn up the large-enterprise ERP market between them, thanks to all Oracle’s acquisitions, the upper-middle market is much more competitive – with SAP, Oracle, Microsoft and several others including Britain’s Kewill and K3 all fighting to improve their position. The global giants are steadily but slowly increasing their positions in that mid-market; so the new merged company’s increased ability to compete, through larger scale and span of functionality, is very important – to it and to its customers.

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