Manugistics Goes Out with a Whimper

The big financial news this week in the Spend Management technology world was JDA Software announcing its acquisition of Manugistics. According to Lora Cecere's summary from the AMR peanut gallery, "JDA Software is acquiring Manugistics for $211M in cash, approximately 1.2 times Manugistics’ FY06 revenue. The combined 2006 revenue potential of the two companies is $390M, with 43% based on recurring maintenance revenue. This transaction has the potential to make JDA the fourth largest player in the supply chain management (SCM) market." Check out the rest of Lora's take if you're interested in the deal. She gets into all of the important points, and there's no need to repeat her excellent analysis here. Needless to say, the multiple of the deal stinks, and I know this is going to have a negative impact on valuations of some deals still in the venture stage in the supply chain world. But heck, it's good to see that Manugistics will not suffer a long, painful death in the Oracle underworld (one wonders, given the low valuation, why Oracle was not more aggressive in the bidding given their continued interest in buying marketshare in the applications market).

Jason Busch

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