Investment accelerates JDA’s next phase of
continued innovation, customer service excellence and growth,
reduces JDA’s total debt and lowers cash interest charges by
approximately $70 million per year
JDA Software Group, Inc. today announced that it has
completed an agreement with funds managed by Blackstone (NYSE: BX)
and New Mountain Capital (NMC) to effect a recapitalization of the
company through a $570 million equity investment. The new capital
will be used to fuel JDA’s product innovation and growth plans to
deliver next generation cloud-based solutions and accelerate
opportunities for current product development and enhancements.
With this strategic investment, JDA will be well-positioned to
continue building on its market-leading portfolio of supply chain
and omni-channel retail solutions. The new equity investment is
expected to be completed by early Q4 2016, pending customary
closing conditions.
“This is a very exciting day for JDA and a testament to the
terrific work of our associates and our 4,000 loyal global
customers,” said Bal Dail, Chairman and Chief Executive Officer,
JDA. “This investment will accelerate our future growth plans and
vision for the business. It not only reaffirms our vision,
financial performance, and innovation track record, but also our
reputation as the market leader in our space and our unique ability
to enable customers to capture opportunities presented by today’s
digital transformation. This investment will accelerate the
development of our SaaS-based solutions and allow us to develop
innovative new solutions on Google Cloud Platform while enhancing
our current large R&D investment in our existing products. No
one spends more on supply chain-focused R&D than JDA, and we
look forward to continuing to innovate for customers through our
JDA Labs and our best-in-class product development teams.”
Strengthened Capital Structure to Help Drive Strategic
Growth
The new equity investment will have no cash interest costs for
JDA and will be used to retire existing debt and reduce JDA’s
interest expense by $70 million per year. The remaining debt will
have no operating covenants and the first maturity will not be
until the end of 2023. NMC, which has been the company’s majority
shareholder since JDA’s merger with RedPrairie in 2012, will be
investing in the equity alongside Blackstone, and will remain as
the company’s majority shareholder post-investment.
“We are thrilled to partner with New Mountain Capital to make
this strategic investment in JDA,” said Viral Patel, Managing
Director at Blackstone. “We are confident that the company is
primed for accelerating growth in the years ahead.”
“Blackstone has strong expertise and history in the software
space, and after lengthy due diligence, we are highly confident in
the strategic direction and management at JDA,” said Martin Brand,
Senior Managing Director at Blackstone. “JDA is the proven leader
in supply chain software, has a strong vision for the future, and
is uniquely positioned to make the strategic investments that will
expand its technological and market share leadership in the years
ahead.”
“We thank JDA’s management for the outstanding job they have
done over the past two years as JDA has transformed itself and
refocused its commitment to being customer-centric. We are excited
to be a part of the major success that we believe JDA can achieve
in the years ahead,” said Pete Masucci, Managing Director of New
Mountain. “We are pleased to have Blackstone as our
shareholder-partner to help us achieve these goals and we’ll work
together with JDA to grow the core business, while launching new
initiatives and offerings that support JDA’s long-term strategy and
vision for delivering a seamless supply chain to its
customers.”
Investment Fuels Future SaaS Development and Company
Growth
This strategic investment will help accelerate the current
growth trajectory at JDA as the company closed the first half of
2016 with its highest year-over-year growth in software revenue
since NMC merged the company with RedPrairie in 2012. In the second
quarter of 2016, JDA posted overall revenue growth of 7 percent
versus the prior year (8% in constant currency), with software
revenue growth of 62 percent and 44 percent growth in
Software-as-a-Service (SaaS) revenue.
JDA counts more than 4,000 manufacturing, third-party logistics,
wholesale distribution and retail customers among its global
customer base including 78 of the top 100 retailers1, 78 of the top
100 consumer goods manufacturers2, 8 of the top 10 global
3PLs, and 20 of the Gartner Supply Chain Top 253 for
2016 list. JDA is also the only company named a leader in all
five Gartner Magic Quadrants covering supply chain and retail
merchandising solutions and is uniquely positioned to help
companies capitalize on the digital transformation affecting
today’s supply chain with the emergence of the Internet of Things
(IoT), Big Data, and analytics. The investment from Blackstone and
NMC will allow JDA to accelerate its R&D investment by building
the company’s next generation of cloud-based solutions on Google
Cloud Platform, JDA’s strategic cloud partner of choice.
Recent JDA Product Innovations Will Be Accelerated by
Investment
Earlier this year, JDA announced the general availability of JDA
Retail.me, which is the first JDA SaaS solution built on Google
Cloud Platform and is a result of JDA’s strategic collaboration
with Google. JDA Retail.me has reinvented retail planning from the
ground up and is the first of several planned applications JDA will
be introducing as part of this next generation retail planning
solution. This new capital investment will help JDA accelerate
research and development to continue building JDA’s next generation
of cloud-based solutions.
JDA’s future innovation is driven in large part through JDA
Labs, a dedicated research and development group within JDA
committed to accelerating technology innovation by identifying,
developing and deploying disruptive capabilities that can transform
the supply chain and retail markets. As a company, JDA holds more
than 400 patents granted and pending, and has filed 28 patent
applications in the last 18 months alone.
Recent product innovations and enhancements across JDA’s
existing portfolio include:
- Delivering a completely reimagined user
experience for warehouse management, along with comprehensive
support for omni-channel fulfillment and returns management for
manufacturers and retailers.
- Expanding its market-leading control
tower and S&OP capabilities through multi-dimensional in-memory
computing, while significantly improving planning speed through
packaged SAP HANA integrations.
- Broadening capabilities for store
workforce schedule management, enabling support for increasingly
stringent and diverse schedule laws, as well as delivering
long-range workforce planning capabilities to strategically manage
human capital assets.
- Delivered comprehensive real-time
visibility and predictive analytics within JDA Transportation
Management across ocean, air, and ground transportation
through a digital hub strategy, powered through partnerships with
TransVoyant, INTTRA, and FourKites.
- Creating next generation Store
Logistics solutions by leveraging JDA partner Intel’s Internet of
Things (IoT) platform to provide real-time inventory tracking to
reduce out-of-stocks, increase associate productivity, and deliver
complete inventory visibility in-store.
In addition, JDA launched the Future Series outlining the future
of supply chain management and retail operations. This series is
unique in the industry and has been equally well-received by
customers and industry analysts.
Bank of America Merrill Lynch, Credit Suisse, and Goldman, Sachs
& Co. acted as advisors to Blackstone on the transaction.
JPMorgan Chase & Co. and Seth Bernstein SMB Capital acted as
advisors to JDA on the transaction.
1Top 100 Retailers, STORES, July
20162Top 100: The Consumer Goods Registry, December
20153According to JDA’s independent analysis of
Gartner’s 2016 list
Tweet This: .@JDASoftware Announces $570M Equity
Investment from Blackstone and New Mountain Capital
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About Blackstone
Blackstone is one of the world’s leading investment firms. We
seek to create positive economic impact and long-term value for our
investors, the companies we invest in, and the communities in which
we work. We do this by using extraordinary people and flexible
capital to help companies solve problems. Our asset management
businesses, with over $350 billion in assets under management,
include investment vehicles focused on private equity, real estate,
public debt and equity, non-investment grade credit, real assets
and secondary funds, all on a global basis. Further information is
available at www.blackstone.com. Follow Blackstone on Twitter
@Blackstone.
About New Mountain Capital
New Mountain Capital is a New York based investment firm that
emphasizes business building and growth, rather than debt, as it
pursues long-term capital appreciation. The firm currently manages
private equity, public equity, and credit funds with over $15
billion in aggregate capital commitments. New Mountain seeks out
what it believes to be the highest quality growth leaders in
carefully selected industry sectors and then works intensively with
management to build the value of these companies. For more
information on New Mountain Capital, please visit
http://www.newmountaincapital.com/
About JDA Software Group, Inc.
At JDA, we’re fearless leaders. We’re the leading provider of
end-to-end, integrated retail, omni-channel and supply chain
planning and execution solutions for more than 4,000 customers
worldwide. Our unique solutions empower our clients to reduce
costs, increase profitability and improve collaboration so they can
deliver on their customer promises every time. Using JDA, you can
plan to deliver. www.jda.com
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JDA Public Relations Contact:Jolene Peixoto, Director,
Corporate Communications+1 978-475-0524, jolene.peixoto@jda.com
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