Logility Inc., a supplier of collaborative solutions to optimize the supply chain, has acquired certain assets and the distribution channel of Demand Management Inc., a provider of supply chain planning systems marketed under the Demand Solutions brand, for $9.5 million in cash. Under the terms of the agreement, Demand Management will immediately become a wholly-owned subsidiary of Logility.
Mike Campbell, president and CEO of Demand Management, will remain with the company as president of the new subsidiary. The acquisition is expected to be accretive to Logility’s earnings and cash flow within the next 12 months, and is expected to contribute approximately $10 million in annual revenue, with 50% as a recurring component.
Logility gains more than 800 active customers in the small and midsize business (SMB) market, which brings the Logility customer base to approximately 1,100. Logility will continue to sell Demand Solutions as a separate product line to the SMB market through Demand Management’s existing value-added reseller distribution network, which currently serves customers in more than 70 countries. Logility will also continue to offer the Logility Voyager Solutions suite to its traditional target market of upper-midsize to Fortune 1000 companies with distributive-intensive supply chains.
The acquisition provides Logility with access to a large customer base and provides an immediate opportunity to expand its worldwide sales and implementation resources, notes Mike Edenfield, Logility’s president and CEO.
Some of the assets that Logility acquires through this transaction include:
* Distribution Channel. Demand Management has a worldwide value-added reseller (VAR) network of 23 organizations with 67 sales, implementation and support resources. This network will continue to sell Demand Solutions products, and Logility plans to introduce components of the Logility Voyager Solutions suite into appropriate areas of this distribution channel.
* Customer Base. Demand Management has approximately 800 active customers in over 70 countries in consumer goods, food and beverage, apparel, life sciences, service parts and retail industries. The VAR channel and Demand Management subsidiary of Logility will continue to support these Demand Solutions customers.
* Technology. The Demand Solution products are designed for SMB companies and include supply chain forecasting, demand planning, inventory planning and replenishment planning. The Demand Solution Stores product enables store-level forecast modeling and replenishment capabilities for retailers.