[November 09, 2009] JDA Software Group to Acquire i2 Technologies Tweet Nov 09, 2009 (Close-Up Media via COMTEX) -- JDA Software Group and i2 Technologies has announced the signing of a definitive merger agreement for JDA Software to acquire i2 Technologies, a provider of supply chain solutions, for an enterprise value of approximately $396 million. On a pro-forma trailing 12-month basis, the combined company has annual revenues of approximately $617 million, including over $275 million of annual maintenance and recurring subscription fees. The companies further noted the near-term operating synergies resulting from this combination are expected to produce net annual cost savings of approximately $20 million. As a result of the pending acquisition, i2 said it has cancelled its previously announced conference call to discuss their third quarter 2009 financial results. As provided in the definitive merger agreement, JDA said it intends to raise approximately $275 million of senior unsecured notes through a best-efforts financing between the signing date and December 18. If JDA raises funds and satisfies other conditions in the definitive merger agreement by December 18, 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 does not raise sufficient funds and meet the conditions necessary to complete the transaction under the Intended Structure, then the parties will proceed with the Alternative Structure. Under the Alternative Structure, 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 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. Direct costs of the acquisition are currently estimated to range from $32 million to $35 million and include financing-related costs, investment-banker fees, legal costs and restructuring costs. JDA will use cash from financing sources (senior unsecured notes or bank financing as appropriate), together with the companies' combined cash balances at closing, to fund the cash obligations of the merger agreement, related transaction expenses, and to provide cash for the combined companies' ongoing working capital and general corporate needs. The Board of Directors of each company has approved the transaction. Consummation of the transaction, which is expected to close in first quarter 2010, is subject to several 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. If the transaction proceeds with the Alternative Structure, approval by JDA shareholders will also be required. The JDA Board of Directors will consider adding one mutually agreeable i2 director to its board, and under the Alternative Structure the appointment is required. JDA has entered into voting agreements with all directors and certain executive officers of i2, and with i2's Series B stockholder, pursuant to which such signatories have agreed to vote in favor of the merger agreement and against any other proposal or offer to acquire i2. The voting agreements restrict the transfer of shares by the signatories, except under certain limited conditions. The definitive merger agreement provides for the following termination fees: (i) $15 million payable to JDA if i2 terminates the merger agreement to accept a superior proposal, changes its recommendation and in certain other circumstances; (ii) $7 million payable to i2 if approval by JDA stockholders is required but not attained; and (iii) $30 million payable to i2 if JDA fails to close the merger due to failure to obtain financing under certain circumstances. Goldman Sachs acted as exclusive financial advisor to JDA and DLA Piper US acted as JDA's legal counsel. Thomas Wiesel Partners acted as exclusive financial advisor to i2 and Munsch Hardt Kopf & Harr, P.C. acted as i2's legal counsel. ((Comments on this story may be sent to [email protected])) [ Back To TMCnet.com's Homepage ]