RedPrairie is offering $45 per share of JDA. The price represents a 33 percent premium above JDA's stock price on Oct. 26, the day rumors of the transaction started to circulate, and a 16 percent premium above JDA's all-time high.
Currently, the supply chain management (SCM) software market is dominated by SAP and Oracle. Since 2010, the SCM market has notched some solid gains as vendors, particularly JDA, posted strong growth rates.
By merging RedPrarie and JDA, the companies hope to accelerate that momentum with portfolios that dovetail, said JDA president and CEO Hamish Brewer. JDA brings chain planning, merchandising and pricing to the table, while RedPrairie leverages its expertise in e-commerce, warehousing, workforce management and store operations.
JDA's SCM, merchandising and pricing solutions are used by 2,700 companies, while RedPrairie's supply chain, workforce and retail solutions have an estimated install base of 60,000 customers in over 50 countries.
"This is a strong combination of two leading companies with highly complementary product suites," said Brewer in a company statement. "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."
Together, the combined company is expected to join the ranks of enterprise software providers that generate over $1 billion in annual revenues. JDA's Hamish Brewer will head the combined company, as RedPrairie CEO Michael Mayoras takes a seat on the board.
RedPrairie and JDA expect the deal to close by the end of the year, pending regulatory clearances and provided that "at least 79 percent of JDA's outstanding shares on a fully diluted basis be tendered," say the firms.