(By Balaseshan) JDA Software Group Inc. (NASDAQ: JDAS), a provider of enterprise software services, said it has agreed to be acquired by privately-held RedPrairie for a total enterprise value of about $1.9 billion. Following the news, shares of JDA jumped 17.40% in premarket.
Under the definitive merger agreement, RedPrairie will effect a cash tender offer to buy all outstanding common shares of JDA for $45 per share, representing a 33% premium to JDA's stock price on October 26, the day before market rumors surfaced stating JDA was exploring a sale. The offer price also represents a 16% premium to JDA's all-time high stock price.
The combined entity will offer a broad portfolio of solutions and services to manage global supply chains - from raw materials, to finished products, into the hands of consumers - through any channel.
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. Brewer has more than 20 years of industry experience and a proven track record of successfully integrating large businesses. RedPrairie's CEO, Michael Mayoras will remain on the board of the combined company.
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% 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.
JDAS closed Wednesday's regular session at $38.15. The stock has been trading between $23.95 and $38.20 for the past 52 weeks.