RedPrairie and JDA Software, providers of enterprise software and services for the extended supply chain, announced that JDA and affiliates of RedPrairie have entered into a definitive merger agreement. The combined entity will offer a broad portfolio of solutions and services to manage global supply chains.
Under the terms of the merger agreement, entities affiliated with RedPrairie will effect a cash tender offer to acquire all outstanding shares of JDA common stock for $45 per share. The $45 per share offer price represents a 33 percent premium to JDA’s stock price on October 26, 2012—the day before market rumors surfaced stating JDA was exploring a sale. The offer price also represents a 16 percent premium to JDA’s all-time high stock price. The transaction has a total enterprise value of approximately $1.9 billion.
The Board of Directors of JDA has approved the transaction, which will create one of the largest global software companies with combined revenues of over $1 billion.
Following completion of the transaction, Hamish Brewer is expected to lead the combined company as its CEO. Mr. Brewer has more than 20 years of industry experience and has integrated large businesses. RedPrairie’s CEO, Michael Mayoras will remain on the board of the combined company.
“This transaction generates tremendous value for JDA shareholders, offering them a meaningful premium for their shares,” said Hamish Brewer, president and CEO of JDA. “This is a strong combination of two leading companies with highly complementary product suites. It will give businesses the power to better manage global commerce through a new world of capabilities. The combined company will have a unique ability to address our customers’ increasingly complex needs with a full spectrum of solutions for planning and execution across the entire value chain.”
RedPrairie CEO, Michael Mayoras said, “This merger establishes a company perfectly suited to meet the evolving demands of the ‘always-on’ mobile consumer. Both companies have historically demonstrated their leadership in supply chain innovation.”
The tender offer and merger are subject to customary closing conditions, including the satisfaction of the minimum tender condition in the tender offer that at least 79 percent of JDA’s outstanding shares on a fully diluted basis be tendered, and clearance from antitrust regulatory authorities. The transaction, which is expected to close by the end of 2012, will be funded with fully committed debt financing from Credit Suisse. In addition to contributing the current equity capital of RedPrairie, New Mountain Capital will also commit additional new cash equity to fund the transaction.
The Board of Directors of the combined company will be composed of the current members of the RedPrairie Board, including: Alok Singh, Michael Mayoras, Nanci Caldwell, Martin Hiscox, Lawrence Jackson, Thomas Manley, Peter Masucci, Tim Pawlenty and Janet Perna. Upon closing of the transaction, RedPrairie expects that Hamish Brewer will join the RedPrairie Board of Directors.