By Lisa Kerner
Charlotte, N.C., Aug. 11 - JDA Software Group Inc. announced that it agreed to acquire i2 Technologies, Inc. for $346 million, or $14.86 per share of i2 common stock.
Under the merger agreement, each issued and outstanding share of i2's series B convertible preferred stock will be converted into the right to receive $1,095.3679 per preferred in cash plus all accrued and unpaid dividends, a JDA news release stated.
The merger is expected to close in the fourth quarter, subject to shareholder approval and completed debt financing arrangements.
"By acquiring i2 we double our addressable market in manufacturing to include discrete manufacturing, complementing our current market leadership in process manufacturing and strengthening our retail and transportation management presence," JDA chief executive officer Hamish Brewer said in the release.
Near-term cost synergies should produce an annual cost savings of about $20 million, while direct costs of the acquisition are estimated at $45 million, the companies noted.
According to the release, if i2 or JDA terminates the transaction under certain circumstances, i2 will be required to pay JDA a non-refundable termination fee of $15 million or JDA will be required to pay i2 a non-refundable termination fee of $20 million.
JDA said it has received commitments from Credit Suisse, Credit Suisse Securities (USA) LLC, Wachovia Bank NA and Wachovia Capital Markets LLC to provide up to $450 million of debt financing to complete the acquisition, including $425 million in term loans and a $25 million revolving credit facility.
In addition, JDA will use the companies' combined cash balances at closing to repay i2's convertible debt, to refinance JDA's existing debt and revolving credit facilities and to provide cash for the combined companies' ongoing working capital.
"Consistent with our strategy after the Manugistics Group Inc. acquisition, we will use our significantly expanded cash flow from operations to de-lever as quickly as possible," added JDA executive vice president and chief financial officer Kristen Magnuson.
JDA, a Scottsdale, Ariz., software services provider, entered into voting agreements with certain directors and executive officers of i2 and with a significant stockholder of i2.
i2 entered into a consent and conversion agreement with Highbridge International LLC as the holder of a majority or more of the Dallas supply chain company's outstanding 5% senior convertible notes due 2015, and also with Thoma Cressey Bravo Funds, as the holders of i2's series B convertible preferred stock.
| Acquirer: | JDA Software Group Inc.
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| Target: | i2 Technologies, Inc.
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| Announcement date: | Aug. 11
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| Transaction total: | $346 million
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| Price per share: | $14.86
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| Termination fee: | $15 million payable by i2, $20 million payable by JDA
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| Expected closing: | Fourth quarter of 2008
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| Stock price for target: | Nasdaq: ITWO: $14.16 on Aug. 8
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