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 released Thursday. 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. While JDA has focused on helping businesses with merchandising and pricing products, RedPrairie’s strengths are in warehousing, store operations and e-commerce, the companies said.
“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.
JDA shares climbed 12 percent to $38.15 Wednesday, fueled by speculation that a deal was coming, then rose to $44.88 in early trading this morning after the transaction was announced.