Thursday, JDA Software Group, Inc. (JDAS), an inventory management software solutions provider for retailers, said it has agreed to buy i2 Technologies, Inc., i2 Technologies, Inc. (ITWO), a supply chain solutions provider, for about $396 million. JDA said it signed a definitive merger agreement with approval from the boards of both companies.
The transaction is indicated with an aggregate enterprise value of $396 million on a diluted basis and is expected to be accretive to JDA's 2010 non-GAAP earnings per share.
The company said that on a pro-forma trailing 12-month basis, the combined company would have annual revenues of approximately $617 million, including over $275 million of annual maintenance and recurring subscription fees.
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.
JDA intends to raise approximately $275 million of senior unsecured notes. Under the Intended Structure plan, each issued and outstanding share of i2 common stock will be converted into the right to receive approximately $12.70 in cash and 0.256x shares of JDA common stock with a combined value equal to $18.00 per share based on JDA's closing stock price on November 4.
If JDA is not able raise sufficient funds and meet the conditions necessary to complete the transaction, the parties will proceed with the Alternative Structure. Under the plan, each issued and outstanding share of i2 common stock will be converted into the right to receive approximately $6.00 in cash and 0.580x shares of JDA common stock with a combined value of $18.00 per share based on JDA's stock price on November 4.
JDA said that it has received a fully-underwritten commitment from Wells Fargo Foothill and Wells Fargo Securities to provide a $120 million term loan and a $20 million revolving credit facility to finance the transaction under the Alternative Structure.
Under either the Intended Structure or the Alternative Structure, each issued and outstanding share of i2's Series B Convertible Preferred Stock will be converted into the right to receive $1,100.00 per share in cash, and will receive all accrued and unpaid dividends.
The acquisition is expected to close in the first quarter of 2010 and is subject to closing conditions, including the approval and adoption of the merger agreement by i2's stockholders, expiration or termination of the applicable Hart-Scott-Rodino waiting periods and regulatory and other customary conditions.
The definitive merger agreement provides for termination fees of $15 million payable to JDA if i2 terminates the merger agreement to accept a superior proposal, changes its recommendation and in certain other circumstances. A fee of $7 million is payable to i2 if approval by JDA stockholders is required but not attained and $30 million would be payable to i2 if JDA fails to close the merger due to failure to obtain financing under certain circumstances.
As a result of the pending acquisition, i2 has canceled its previously announced conference call to discuss its third quarter 2009 financial results.
JDA is currently trading on the Nasdaq at $22.03, up$1.33 or 6.43%.
ITWO is currently trading on the Nasdaq at $17.74, up $1.23 or 7.45%.
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June 05, 2026 16:18 ET A busy week for economic news flow saw a slew of reports being released that reflected the trends in the U.S. labor market. In Europe, economic growth and inflation data gained attention as the European Central Bank and Bank of England head for policy session later in the month. In Asia, the monetary policy session of the Indian central bank was in focus as the country, a major oil importer, reels under the pressures of a weaker rupee and rising inflation.