JDA Software Completes Manugistics Acquisition

Retail solutions provider adds supply chain functionality, offers vertically focused optimization solution to the global supply and demand chain market

Retail solutions provider adds supply chain functionality, offers vertically focused optimization solution to the global supply and demand chain market

Scottsdale, AZ — July 7, 2006 — Retail solutions company JDA Software Group has purchased all outstanding equity of supply chain software company Manugistics Group for approximately $213 million in cash.

In finalizing the acquisition, JDA said it had achieved its goal of significantly growing its size and reach up the supply chain with the addition of Manugistics 800 customers and synchronized supply chain and revenue management solutions.

"JDA is now uniquely positioned to offer the first vertically focused optimization solution to the global supply and demand chain market that addresses mission critical requirements from raw materials to the consumer," the company said in a statement.

"Today begins a new era of growth and opportunity for JDA and Manugistics worldwide customers, associates and shareholders," said JDA CEO Hamish Brewer. "JDA is now best positioned to deliver clearly differentiated expertise and compelling innovation to the global supply and demand chain market."

Brewer said that synergies in operations, administrative functions and infrastructure costs were expected to produce annual savings of $25-$30 million dollars within the next 12 months.

Manu's Customers React

JDA presented its vision and preliminary product integration plans to nearly 200 leading consumer goods manufacturers and other customers at Manugistics Executive Forum and Client Steering Committee in Orlando, Fla., from June 19-21.

Bill Nienburg, vice president of sales and operations planning at Manugistics customer Sara Lee, suggested that the deal represented an opportunity to gain solutions that will help the industry make some progress towards realizing the vision of a lean and consumer driven demand chain. Nienburg was among executives from nearly 200 consumer goods manufacturers and other customers at Manugistics Executive Forum and Client Steering Committee in Orlando, Fla., June 19-21.

"There is still untapped potential in improved visibility to the consumer signal in a truly integrated demand/supply chain," said Nienburg. "Many companies share that vision and recognize that unlocking that potential opens the door to significant opportunities. If JDA can successfully translate its experience in acquisitions, their presence in the retail sector combined with Manugistics supplier optimization capabilities means we'll have a single company focusing their resources and energy on developing integrated solutions with a real end-to-end perspective."

Another Manugistics customer present at the event and encouraged by JDA's acquisition is Greg Gries, data systems manager at Perdue Farms Incorporated, a leading international food and agriculture business.

"From a cash flow perspective, this acquisition has eliminated the concern about the viability of Manugistics," Gries said. "While there is communication that all Manugistics customers need to hear from JDA regarding the product strategy and industry commitment, overall we're excited. There's opportunity to achieve some synergistic results with the integration of JDA and Manugistics applications. For example, we are looking forward to learning more about how JDA's best-of-breed demand planning solutions can enhance what we've implemented with Manugistics."

Gries said that he was encouraged that some Manugistics' senior management will take on executive roles at JDA. "It's also a positive sign that JDA is retaining the office in Maryland and having some senior management in this location," he added, referring to Manugistics offices in Rockville, Md.

Brewer announced to customers that JDA planned to complete the integration of the JDA Portfolio and Manugistics products over the next 18-24 months using JDA's smart client technology based on Microsoft .NET.


Additional Articles of Interest

— Stryker Instruments achieved success in inventory optimization by taking a no-frills approach and relying on collaborative supplier relations. Read more in "Keeping Supply Chain Transformation Simple," the Best Practices case study in the April/May 2006 issue of Supply & Demand Chain Executive.

— As you read this, someone in your corporation is treading the ethical line because of expediency, undue pressure or because they don't know better. How can we protect our organizations from flawed reciprocal business awards, conflicts of interest and a myriad of other issues? Read more in "Ethics and Procurement: The Case for Full Disclosure," the Final Thoughts column in the April/May 2006 issue of Supply & Demand Chain Executive.