IBM, Epicor and other vendors could be eyeing a purchase of supply-chain software vendor JDA, analysts said Tuesday following a published report that the company was looking for suitors.
The sale activities are “at an advanced stage,” with a number of potential buyers showing interest in JDA, according to the report, published by Reuters late Monday. Along with “strategic buyers,” private equity firms are said to be interested, according to Reuters.
A spokeswoman for JDA didn’t immediately respond to a request for comment on Tuesday.
JDA’s reported intentions came as some surprise to analyst Bob Ferrari of the Ferrari Consulting and Research Group, who authors the Supply Chain Matters blog. “All the indicators were that they were going at it alone,” he said.
In terms of functionality, JDA has sound capabilities for retail companies, “not just in terms of supporting the supply chain, but also the merchandising activities that go into retail,” Ferrari said.
Another motive for JDA to seek a buyer could be its desire to get deeper into cloud computing, something that could require a deeper-pocketed owner. At JDA’s recent user conference, officials talked about taking the company’s existing software and cloud-enabling them, Ferrari said.
JDA’s software incorporates Microsoft’s .NET technology stack. To that end, JDA buyers “could include Aptean, Epicor, and other companies which would benefit from a .NET stack and retail and supply chain customer base,” said analyst Ray Wang, CEO of Constellation Research.
Microsoft itself may also be interested, given the natural fit JDA would make with its Dynamics ERP (enterprise resource planning) software. But Microsoft is a dark horse at best, according to Wang. “They have seemed to avoid large acquisitions in the back office side, focusing more on front-office CRM [customer relationship management].”
Meanwhile, Oracle and IBM both have sizable consulting practices for retail, Wang said. Infor, one of the industry’s largest independent ERP vendors, could also benefit from a JDA acquisition, Wang said.
Such a deal could be expensive, as JDA reported nearly US$700 million in revenue for its fiscal 2011.
The company also drew headlines earlier this year when it disclosed that the US Securities and Exchange Commission was investigating some of its accounting practices. The vendor ultimately restated a number of financial statements, but said an internal audit had uncovered no intentional wrongdoing.