Blackstone to Back JDA Software
August 19 2016 - 10:20AM
Dow Jones News
Blackstone Group LP on Friday said it took up a proposal from
New Mountain Capital to pump $570 million into JDA Software Group
Inc. in a deal that gives the firm a minority stake in the
supply-chain management software provider that was close to a sale
to Honeywell International Inc.
The Wall Street Journal on Thursday reported New Mountain last
week reached out to fellow New York firm Blackstone, proposing a
structured financing deal in exchange for preferred stock and
equity warrants in JDA that would entitle the private-equity giant
to a 40% stake in the company and guarantee a return of 7.5%.
New Mountain, the company's majority shareholder since JDA's
merger with RedPrairie in 2012, will remain so.
JDA said the new capital will be used to fuel product
innovation, including cloud-based development. The equity
investment is expected to be completed by early in the fourth
quarter. It will have no cash interest costs for JDA and will be
used to retire existing debt and reduce its interest expense by $70
million a year.
JDA has about $2 billion in outstanding debt, representing about
nine times its earnings before interest, taxes, depreciation and
amortization, according to people familiar with the matter.
The deal was contingent on the outcome of JDA's negotiations
with Honeywell, an industrial conglomerate that makes products
ranging from air conditioners and commercial boilers to
airplane-cockpit controls and industrial gloves. Honeywell had been
close to sealing a deal to acquire JDA for about $3 billion,
including debt.
Write to Anne Steele at Anne.Steele@wsj.com and Amy Or at
amy.or@wsj.com
(END) Dow Jones Newswires
August 19, 2016 10:05 ET (14:05 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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