JDA Software Group To Acquire i2 Technologies

• Acquisition establishes leading global provider of supply chain management software with more than 6,000 customers; Expands JDA's addressable market to include Discrete Manufacturing and extends leadership in Transportation
• Combined revenues approximate $617M(on a trailing twelve-month basis) with a broad, seamless portfolio of products and services for the Manufacturing, Wholesale Distribution, Retail and Services Industries
• Transaction expected to be accretive in 2010; $20 million of net, near-term financial synergies
• Transaction scheduled to close in first quarter 2010; structured to ensure a high degree of completion certainty

JDA Software Group, Inc. and i2 Technologies, Inc. recently announced the signing of a definitive merger agreement for JDA Software to acquire i2 Technologies, Inc., a leading global provider of supply chain solutions, for an enterprise value of approximately $396M. The combination of the two companies creates a global leader in the market for supply chain planning and optimization. On a pro-forma trailing 12-month basis, the combined company has annual revenues of approximately $617M, including over $275M of annual maintenance and recurring subscription fees.

According to JDA Chief Executive Officer Hamish Brewer, the i2 acquisition will firmly establish JDA as a leading enterprise software company with a deep focus on supply chain management and a full complement of managed and hosted services offerings.

"Our strategic rationale for acquiring i2 is even more compelling today than it was a year ago. The challenges of the economic crisis have focused the market's attention on the disciplines of supply chain planning and JDA has established a leading role in this active market. Integrating i2's solutions and expertise will only expand our opportunity to build substantial new shareholder value over the coming years."

"Over time we have come to know the i2 business very well and based on our detailed diligence and proven track record for delivering value, I am confident that we can reliably unlock the sizable potential that exists within this company," added Brewer.

"This is a powerful combination," said i2 Chairman, President and CEO Jackson L. Wilson, Jr. "Our customers will be supported by a team of supply chain professionals that is unmatched in the industry. Innovation will accelerate. Our expanded geographic footprint will enhance sales penetration and service delivery. This is the right transaction for our customers, partners and employees."

Snapshot of the Combined Company

By combining JDA and i2, the resulting company will have significantly improved operating leverage and a strong financial position. The near-term operating synergies resulting from this combination are expected to produce net annual cost savings of approximately $20M. As a result of the pending acquisition, i2 has cancelled its previously announced conference call to discuss their third quarter 2009 financial results.

"JDA is using a balanced combination of cash on hand, debt financing and JDA common stock to finance the transaction. We intend to access the high-yield loan market to finance approximately $275M of acquisition financing," commented Pete Hathaway, JDA's Executive Vice President and Chief Financial Officer. "The company's pro-forma leverage is anticipated to be modest and the combined cash flow from operations will be significant."

Terms of the Transaction

A primary goal of this transaction is to provide a high degree of completion certainty to the shareholders of both JDA and i2. With this in mind, the acquisition will be completed following one of the structures described below. JDA is pursuing the Intended Structure in order to provide the mix of consideration described below. Otherwise, JDA will complete the acquisition using the Alternative Structure.

Intended Structure

As provided in the definitive merger agreement, JDA intends to raise approximately $275M of senior unsecured notes through a best-efforts financing between the signing date and December 18, 2009. If JDA raises sufficient funds and satisfies other conditions in the definitive merger agreement by December 18, 2009, each issued and outstanding share of i2 common stock will be converted into the right to receive approximately $12.70 in cash and 0.256x shares of JDA common stock with a combined value equal to $18.00 per share based on JDA's closing stock price on November 4, 2009.

Alternative Structure

If JDA does not raise sufficient funds and meet the conditions necessary to complete the transaction under the Intended Structure, then the parties will proceed with the Alternative Structure. Under the Alternative Structure, each issued and outstanding share of i2 common stock will be converted into the right to receive approximately $6.00 in cash and 0.580x shares of JDA common stock with a combined value of $18.00 per share based on JDA's stock price on November 4, 2009. JDA has received a fully-underwritten commitment from Wells Fargo Foothill and Wells Fargo Securities to provide a $120M term loan and a $20M revolving credit facility to finance the transaction under the Alternative Structure.

Under either the Intended Structure or the Alternative Structure, each issued and outstanding share of i2's Series B Convertible Preferred Stock will be converted into the right to receive $1,100.00 per share in cash, and will receive all accrued and unpaid dividends.

The transaction has an aggregate enterprise value of $396M on a diluted basis and is expected under both transaction structures to be accretive to JDA's 2010 non-GAAP EPS. The following table provides an overview of the net purchase price (enterprise value) to acquire i2, excluding direct costs of the acquisition:

Direct costs of the acquisition are currently estimated to range from $32 million to $35 million and include financing-related costs, investment-banker fees, legal costs and restructuring costs.

JDA will use cash from financing sources (senior unsecured notes or bank financing as appropriate), together with the companies' combined cash balances at closing, to fund the cash obligations of the merger agreement, related transaction expenses, and to provide cash for the combined companies' ongoing working capital and general corporate needs.

The Board of Directors of each company has approved the transaction. Consummation of the transaction, which is expected to close in first quarter 2010, is subject to several closing conditions, including the approval and adoption of the merger agreement by i2's stockholders, expiration or termination of the applicable Hart-Scott-Rodino waiting periods and regulatory and other customary conditions. If the transaction proceeds with the Alternative Structure, approval by JDA shareholders will also be required. The JDA Board of Directors will consider adding one mutually agreeable i2 director to its board, and under the Alternative Structure the appointment is required.

JDA has entered into voting agreements with all directors and certain executive officers of i2, and with i2's Series B stockholder, pursuant to which such signatories have agreed to vote in favor of the merger agreement and against any other proposal or offer to acquire i2. The voting agreements restrict the transfer of shares by the signatories, except under certain limited conditions.

The definitive merger agreement provides for the following termination fees: (i) $15M payable to JDA if i2 terminates the merger agreement to accept a superior proposal, changes its recommendation and in certain other circumstances; (ii) $7M payable to i2 if approval by JDA stockholders is required but not attained; and (iii) $30M payable to i2 if JDA fails to close the merger due to failure to obtain financing under certain circumstances.

Goldman Sachs acted as exclusive financial advisor to JDA and DLA Piper US LLP acted as JDA's legal counsel. Thomas Wiesel Partners acted as exclusive financial advisor to i2 and Munsch Hardt Kopf & Harr, P.C. acted as i2's legal counsel.

Investor Conference Call and Webcast Information for Today's Announcement

JDA will host an investor conference call and webcast today, November 5, 2009 at 10:00 a.m. Eastern time to discuss the pending acquisition of i2. To hear the audio portion of the call and for investor question and answers at the end, dial (877) 757-0919 (United States/Canada) or (719) 234-7871 (International) and enter participant passcode 873430.

To view the webcast of the call, go to the following Web page 10 minutes prior to the time of the conference call: http://www.talkpoint.com/viewer/starthere.asp?Pres=128624. The conference call recording will be available for replay two hours after the call's completion. To access the recording, dial (888) 348-4629 (United States/Canada) or (719) 884-8882 (International) and enter replay pin number 873430.

Industry Analyst Conference Call and Webcast Information for Today's Announcement

JDA will host an industry analyst conference call and webcast today, November 5, 2009 at 11:30 a.m. Eastern time to discuss the pending acquisition of i2. To hear the audio portion of the call and for questions and answers at the end, dial (866) 880-8920 (United States/Canada) or (706) 679-7356 (International). To view the webcast of the call, go to the following Web page 10 minutes prior to the time of the conference call: https://www.livemeeting.com/cc/jda/join. – using Meeting ID: JDA2009 and Entry Code: 9W7673.

About i2 Technologies, Inc. (Pre Acquisition)

Throughout its more than 20-year history of innovation and value delivery, i2 has dedicated itself to building successful customer partnerships. As a full-service supply chain company, i2 is uniquely positioned to help its clients achieve world-class business results through a combination of consulting, technology, and managed services. i2 solutions are pervasive in a wide cross-section of industries..

About JDA Software Group, Inc. (Pre Acquisition)

JDA Software Group, Inc. is the world's leading supply chain solutions provider, helping companies optimize operations and improve profitability. JDA drives business efficiency for its global customer base of more than 5,800 retailers, manufacturers, wholesaler-distributors and services industries companies through deep domain expertise and innovative solutions. JDA's combination of unmatched services, together with its integrated yet modular solutions for merchandising, supply chain planning and execution and revenue management, leverage the strong heritage and knowledge capital of market leaders including Manugistics, E3, Intactix and Arthur. When supply chain results matter, companies turn to JDA. For more information, visit www.jda.com.

SOURCE: JDA Software Group, Inc. & i2 Technologies, Inc.