JDA Software has issued $250M in a private offering (qualified institutional buyers) in Sr. Notes. The company plans to use the proceeds in order to fund a $434M acquisition of i2 Technologies (NASDAQ: ITWO).
JDA provides inventory management software for retailers. i2 technologies is in the business of supply chain management and offers software applications and SaaS.
This will be JDA’s second attempt to acquire i2 technologies after a failure in financing this past November. JDA had entered a $346M deal which provided special provisions to allow the buyer (JDA) to terminate the agreement in case of inability to raise financing. In most cases in the past, the use of this provision leads into further negotiation of the purchase price. However, when JDA attempted to lower the price, i2 refused, and instead JDA was forced to pay a $20M termination fee.
In addition to JDA’s debt offering, the company will fund their acquisition with a $120M loan and a $20M revolver from Wells Fargo.