RedPrairie Corp., backed by private-equity firm New Mountain Capital LLC, agreed to acquire JDA Software Group Inc. in a $1.9 billion deal that merges two providers of software for managing corporate supply chains.
RedPrairie and New Mountain Capital will pay $45 a share, a 33 percent premium over JDA’s stock price on Oct. 26 before speculation of the deal surfaced, according to a statement today. The board of Scottsdale, Arizona-based JDA has approved the transaction.
The deal will create a supply-chain software company with more than $1 billion in revenue. Adding JDA, which is focused on merchandising and product pricing, will help RedPrarie expand beyond its traditional businesses in warehousing, store operations and e-commerce, said Richard Williams, an analyst at Cross Research.
“A lot of customers were buying both, and there was not much overlap between the two,” Williams said in an interview.
JDA shares advanced 17 percent to $44.76 at the close in New York, the biggest gain in more than three years.
“This is a strong combination of two leading companies with highly complementary product suites,” Hamish Brewer, JDA president and chief executive officer, said in the statement. Brewer will retain the CEO role at the combined company, while RedPrairie CEO Michael Mayoras will serve on the board.
The purchase, which the companies expect to complete this year, will be financed with debt from Credit Suisse Group AG. New Mountain Capital, based in New York, will invest additional cash to fund the transaction.
Greenhill & Co. and Credit Suisse served as financial advisers to RedPrairie, with Fried, Frank, Harris, Shriver & Jacobson LLP acting as legal counsel. JPMorgan Chase & Co. was JDA’s financial adviser. DLA Piper LLP provided legal counsel to JDA, and Cravath, Swaine & Moore LLP represented the independent directors on JDA’s board.