JDA and i2 Technologies today announced the signing of a definitive merger agreement for JDA Software to acquire i2 Technologies, Inc., a leading global provider of supply chain solutions, for an enterprise value of approximately $396 million. The combination of the two companies creates a global leader in the market for supply chain planning and optimization. On a pro-forma trailing 12-month basis, the combined company has annual revenues of approximately $617 million, including over $275 million of annual maintenance and recurring subscription fees.
According to JDA Chief Executive Officer Hamish Brewer, the i2 acquisition will firmly establish JDA as a leading enterprise software company with a deep focus on supply chain management and a full complement of managed and hosted services offerings.
Our strategic rationale for acquiring i2 is even more compelling today than it was a year ago. The challenges of the economic crisis have focused the markets attention on the disciplines of supply chain planning and JDA has established a leading role in this active market. Integrating i2s solutions and expertise will only expand our opportunity to build substantial new shareholder value over the coming years.
Over time we have come to know the i2 business very well and based on our detailed diligence and proven track record for delivering value, I am confident that we can reliably unlock the sizable potential that exists within this company, added Brewer.
This is a powerful combination, said i2 Chairman, President and CEO Jackson L. Wilson, Jr. Our customers will be supported by a team of supply chain professionals that is unmatched in the industry. Innovation will accelerate.Our expanded geographic footprint will enhance sales penetration and service delivery. This is the right transaction for our customers, partners andemployees.
Snapshot of the Combined Company
By combining JDA and i2, the resulting company will have significantly improved operating leverage and a strong financial position. The near-term operating synergies resulting from this combination are expected to produce net annual cost savings of approximately $20 million. As a result of the pending acquisition, i2 has cancelled its previously announced conference call to discuss their third quarter 2009 financial results.
JDA is using a balanced combination of cash on hand, debt financing and JDA common stock to finance the transaction. We intend to access the high-yield loan market to finance approximately $275 million of acquisition financing, commented Pete Hathaway, JDAs Executive Vice President and Chief Financial Officer. The companys pro-forma leverage is anticipated to be modest and the combined cash flow from operations will be significant.
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