Executive Briefings

Another One Bites the Dust: JDA Announces Purchase of Manugistics for $211m in Cash

Manugistics Group Inc., one of the few remaining "best-of-breed" software vendors of any significant size, is being snapped up by JDA Software Group Inc., according to an announcement in late April. JDA will acquire Manugistics for approximately $211m in cash, aided by a $50m investment from Thoma Cressey, a private equity investor with a focus on business software. According to JDA, the Manugistics brand will be retained, though various assets will be consolidated as JDA increases its marketing presence in the retail and consumer goods sectors. So is it a good deal for JDA? AMR Research thinks so, with reservations. According to a report by analysts Lora Cecere, Robert Garf, Mark Hillman and Greg Aimi, JDA has a long history of making acquisitions work, boosting value for shareholders and customers alike. With the deal, they say, JDA has a chance of becoming "a more serious enterprise suite contender in the hot retail market, but it's not a certainty." The vendor needs to move quickly to position itself in the market and develop an integration plan that focuses on such critical applications as transportation and demand management. It must also address issues of overlapping functionality. And it must make a strong bid for continued maintenance revenue from Manugistics' manufacturing customers. Meanwhile, AMR says, JDA will have to fend off strong competition from rivals in the supply chain management space, especially SAP AG and Logility.

Manugistics Group Inc., one of the few remaining "best-of-breed" software vendors of any significant size, is being snapped up by JDA Software Group Inc., according to an announcement in late April. JDA will acquire Manugistics for approximately $211m in cash, aided by a $50m investment from Thoma Cressey, a private equity investor with a focus on business software. According to JDA, the Manugistics brand will be retained, though various assets will be consolidated as JDA increases its marketing presence in the retail and consumer goods sectors. So is it a good deal for JDA? AMR Research thinks so, with reservations. According to a report by analysts Lora Cecere, Robert Garf, Mark Hillman and Greg Aimi, JDA has a long history of making acquisitions work, boosting value for shareholders and customers alike. With the deal, they say, JDA has a chance of becoming "a more serious enterprise suite contender in the hot retail market, but it's not a certainty." The vendor needs to move quickly to position itself in the market and develop an integration plan that focuses on such critical applications as transportation and demand management. It must also address issues of overlapping functionality. And it must make a strong bid for continued maintenance revenue from Manugistics' manufacturing customers. Meanwhile, AMR says, JDA will have to fend off strong competition from rivals in the supply chain management space, especially SAP AG and Logility.