RedPrairie To Acquire JDA Software To Battle Oracle, SAP

By David Zielenziger | November 01 2012 1:16 PM

Shares of JDA Software (Nasdaq: JDAS) soared 17 percent after the supply chain specialist agreed to be acquired by private RedPrairie Corp. in a $1.9 billion deal.

Reuters

According to a new Gartner report, enterprise IT supply chains will be targeted and compromised in the near future, forcing changes in the structure of the IT marketplace and how IT will be managed moving forward.

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The enlarged RedPrairie will be a bigger competitor to giants Oracle Corp. (Nasdaq: ORCL) and Germany's SAP (NYSE: SAP), both leaders in the sector.

RedPrairie, of Alpharetta, Ga., has been backed by private equity specialist New Mountain Capital of New York City, which together said they would offer $45 per share for JDA Software, of Scottsdale, Ariz., one of the most prominent providers of software to retailers and manufacturers.

In Thursday afternoon trading, JDA Software shares rose $6.63 to $44.78.

JDA's CEO, Hamish Brewer, will be CEO of the enlarged company, while RedPrairie CEO Michael Mayoras will become a director.

RedPrairie's senior managers include alumni of Peoplesoft, now a part of Oracle, as well as Progress Software (Nasdaq: PRGS). Among its directors is former Minnesota Gov. Tim Pawlenty, who mounted a bid for the Republican nomination for president this year.

Oracle and SAP in the past have battled over supply chain companies, including Retek, won by Oracle for $630 million in 2005.

Popular consumer products such as the iPhone 5 from Apple Inc. (Nasdaq: AAPL), the world's most valuable technology company, have illustrated the importance of management ability to track each component in a product.

The JDA Software deal leaves several smaller companies that could be acquired by others, including Israel's Retalix (Nasdaq: RTLX), whose shares rose 2 percent to $20.01, and SPS Commerce (Nasdaq: SPSC), of Minneapolis, whose shares rose a nickel to $36.30.