JDA acquisition opens door to federal work

JDA Software Group Inc. will retain Manugistics Group Inc.'s clients in the federal government, aerospace and defense sectors after it completes its $211 million cash purchase of the supply-chain management company, a JDA Software spokeswoman confirmed today.

"We definitely look at them as new growth opportunities for JDA," said Maureen Tuskai, spokeswoman for JDA Software, referring to Manugistics' clients.

Since the deal was just announced Monday, Tuskai said it is too early to say more about JDA Software's plans for the government market. JDA expects the deal to close in two to three months, she said. Hamish Brewer, JDA Software's chief executive officer, will serve as CEO of the combined company.

Headquartered in Scottsdale, Ariz., JDA Software provides software for retailers to manage their business processes. It has more than 4,900 retail, manufacturing and wholesale clients in 60 countries, but does not provide software for federal government or aerospace and defense industries. JDA Software has about 1,150 employees and reported 2005 revenue of $215.8 million and net income of $7 million.

Besides the federal government and aerospace sectors, Manugistics of Rockville, Md., sells supply-chain and demand and revenue management software to the consumer goods, retail and service industries, such as travel, transportation and hospitality.

Manugistics government and defense industry customers include the Defense and Energy departments, Air Force and Marine Corps. Its integrator customers include BAE Systems plc, Boeing Co., L-3 Communications Holdings Inc., Lockheed Martin Corp., Northrop Grumman Corp. and Raytheon Co. It also is one of the companies participating in the General Services Administration's SmartBuy program that lets agencies use aggregate buying for commercial software purchases to achieve bulk savings.

Manugistics employs about 760 workers and had annual revenue of $193.1 million with a net loss of $55.3 million for its fiscal year ended Feb. 28, 2005. Coinciding with the announcement of its purchase by JDA, Manugistics yesterday issued its preliminary results for its fiscal 2006 fourth quarter ended Feb. 28. The company expects total revenue of $44 million to $46.5 million compared to total revenue of $45.2 million in the fourth quarter of fiscal 2005.

Manugistics will issue its official results for its fiscal 2006 fourth quarter and year-end on May 11. The company cancelled a conference call and audio Web-cast that it previously scheduled following the release of the results.