November 1, 2012

Red Prairie to buy JDA Software for $1.9 billion in bid to define supply chain computing in mobile world

JDA chief to run new firm; Mayoras, Red Prairie head, to remain on board of directors.

By DC Velocity Staff

Red Prairie Corp. said today it will buy JDA Software Group Inc. for $1.9 billion in cash, a move that combines two leaders in enterprise software and services and could herald a new era in global supply chain technology supporting the fast-growing mobile marketplace.

Red Prairie, based in Alpharetta, Ga., a suburb of Atlanta, said the merged entity will be run by Hamish Brewer, JDA's president and CEO. R. Michael Mayoras, Red Prairie's CEO, will remain on the merged entity's board of directors. The transaction, which is subject to regulatory and JDA shareholder approval, is expected to close by year's end.

The companies generate combined annual revenues of more than $1 billion.

Red Prairie and JDA executives hailed the transaction as a blending of companies with complementary supply chain software capabilities. Red Prairie's strength lies in supporting operations in the warehousing, workforce management, store operations, and e-commerce categories. JDA's forte is providing solutions to enhance supply chain planning, merchandising, and pricing.

JDA also has a strong position in "cloud" computing, where users can access data from web-based servers at anytime and from virtually any location.

In a statement announcing the deal, Brewer said the combined company will "give businesses the power to better manage global commerce through a new world of capabilities." Red Prairie executives said the deal would be a boon to customers working in either the business-to-business or the business-to-consumer channels, or for the increasing number of retailers and manufacturers that function in both.

"This merger establishes a company perfectly suited to meet the evolving demands of the 'always-on' mobile consumer," Mayoras said in the statement.

The acquisition of Scottsdale, Ariz.-based JDA promises a big payday for JDA shareholders. At a price equal to $45 a share, the transaction values JDA at a 33-percent premium to the stock's closing price on Oct. 26. JDA stock began to move higher earlier in the week as rumors surfaced that the company was a potential acquisition target.

Privately held Red Prairie is owned by New Mountain Capital LLC, a New York-based public equity, private equity, and credit capital firm.

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