Earlier this week, Manugistics agreed to be acquired by JDA, one of the leading software vendors in the retail industry, ending years of speculation about Manugistics' future.
Manugistics, one of the leading supply chain management vendors, had been struggling Manugistics has had a rough for the past few years. Revenue was at a peak of $310 million in 2002, but dropped to $272M in 2003, $243M in 2004, and $193m in 2005.
JDA is one of the leading enterprise system vendors in the retail industry, the other being Oracle with its recent acquisition of Retek, and SAP, which is building its own solutions largely from scratch.
JDA has been around since the 1970s, and has been acquiring a number of smaller firms in the retail space over the past seven years, including Timera (workforce management), Engage and Zapotec (advertising, marketing, and promotions), Vista (collaborative commerce), J-Commerce (point-of-sale), E3 (inventory optimization), Neovista (data mining), Intactix (retail space management), and Arthur Retail (advanced planning and allocation).
JDA's bid for Manugistics gives it an even wider portfolio of products to offer its retail clients. The deal also gives JDA access to Manugistics' enviable list of top retail clients, such as Hershey Foods, Federated Stores, Kraft, ConAgra, Unilever, Campbell Soup, Avon, Limited Brands, Staples, Sears, Black and Decker, and Goodyear Tire.
However, one must question what JDA intends to do with those Manugistics products that are not related to retail, such as Manugistics extensive offerings in aerospace and defense, which it acquired from WDS a few years ago. Will JDA continue to support those products, or will be there be a series of divestitures from JDA to buyers interested in Manugistics' cats and dogs, as so to speak?Supply Chain Digest has more on the JDA/Manugistics deal.
A Spectator reader also points out that Manugistics' competitor, i2, has wasted no time jumping on the PR horse, offering Manugistics' clients a program to "upgrade" to i2's products.Update, Apr. 28.
The word to me from inside Manugistics is that most employees are feeling good about the deal. The rumors and speculation about Manugistics' future were getting tiring and this deal resolves questions about its financial viability. My source, who has been through several acquisitions, says you can tell alot about a company by how its executives present themselves, and the folks from JDA have been particularly upbeat and appear to "have it together." Manugistics has lost some good leadership in the past few years and will benefit from the management depth that JDA brings to the deal.
My source points to the strong combination of consumer-packaged goods (Manugistics core strength) with retail (JDA core strength). He is less concerned about the future of other products in Manugistics' portfolio: those targeting government, travel, transportation, and hospitality sectors. Even though these comprise a small part of Manugistics' business, they are profitable and they often lead to innovations that can be introduced into Manugistics other products.
Bottom line? The deal looks good from all angles. Related postsSAP walks away from Retek deal
Manugistics prepping itself for the auction block?