i2 has been having some tough times lately. CEO Mike McGrath resigned in July. Then the firm announced an earnings shortfall for its second quarter. It also said that it wouldn't be able to meet its previous forecast for the full year.
Now, one of i2's largest shareholders is calling for i2 to throw in the towel
and search for a buyer. In an SEC filing yesterday, Amalgamated Gadget LP, said that i2 is too small to survive as an independent company and is better off to seek to be acquired.
Amalgamated isn't just blowing smoke. The size of its stake in i2 gives it the right to elect two board members. It says that it has already elected Michael Simmons, formerly from General Electric, as a board member and it is now seeking someone to fill its second open position.
i2 has been trying to recover for years from the tech downturn earlier this decade, but never fully seems to be able to get traction. Most recently, it has been trying to juice up its business model by adding more services to its traditional software product mix. This strategy, to me, has a lot of attraction in that supply chain management projects are often highly customized to the specific industry and supply chain than pure off-the-shelf solutions.
Nevertheless, an acquisition is probably the best path right now for i2, to put it in the hands of a larger firm that can better leverage its extensive product line, its impressive client list, and its patent portfolio.
The question is, who will step up to this opportunity? Names like Oracle and Infor are often mentioned, since they already have a history of making such acquisitions. But I think that some of the large IT services firms, both in the U.S. and in India, might be potential buyers. Think CSC, Accenture, IBM Global Services, or Infosys. I'm just speculating here, but since, as mentioned earlier, i2's business is increasingly services-oriented, such a combination might make a lot of sense.Related postsi2 seeks patent license shake-down feesFormer i2 CEO learns crime does not payi2 innovates with hosted vendor-managed inventory servicesSAP: If you can't beat 'em, sue 'emi2 kills off its SRM businessi2 fires 300, struggles to refocus