• ITVI.USA
    15,285.200
    -0.340
    0%
  • OTLT.USA
    2.779
    0.003
    0.1%
  • OTRI.USA
    21.420
    -0.030
    -0.1%
  • OTVI.USA
    15,255.990
    -0.630
    0%
  • TSTOPVRPM.ATLPHL
    3.300
    -0.240
    -6.8%
  • TSTOPVRPM.CHIATL
    2.950
    -0.020
    -0.7%
  • TSTOPVRPM.DALLAX
    1.440
    0.000
    0%
  • TSTOPVRPM.LAXDAL
    3.310
    0.060
    1.8%
  • TSTOPVRPM.PHLCHI
    2.150
    0.020
    0.9%
  • TSTOPVRPM.LAXSEA
    3.950
    -0.100
    -2.5%
  • WAIT.USA
    126.000
    1.000
    0.8%
  • ITVI.USA
    15,285.200
    -0.340
    0%
  • OTLT.USA
    2.779
    0.003
    0.1%
  • OTRI.USA
    21.420
    -0.030
    -0.1%
  • OTVI.USA
    15,255.990
    -0.630
    0%
  • TSTOPVRPM.ATLPHL
    3.300
    -0.240
    -6.8%
  • TSTOPVRPM.CHIATL
    2.950
    -0.020
    -0.7%
  • TSTOPVRPM.DALLAX
    1.440
    0.000
    0%
  • TSTOPVRPM.LAXDAL
    3.310
    0.060
    1.8%
  • TSTOPVRPM.PHLCHI
    2.150
    0.020
    0.9%
  • TSTOPVRPM.LAXSEA
    3.950
    -0.100
    -2.5%
  • WAIT.USA
    126.000
    1.000
    0.8%
American ShipperWarehouse

Honeywell rumored to be buying JDA for $3b

Industrial conglomerate Honeywell is reportedly in talks to purchase JDA Software, one of the largest developers of transportation management system and warehouse management system platforms.

   The U.S. industrial conglomerate Honeywell is reportedly in talks to acquire supply chain technology provider JDA Software for $3 billion, according to a Reuters report this week.
   JDA provides transportation, inventory, warehouse and workforce management solutions to roughly 4,000 customers across a range of retailing and manufacturing verticals. It is generally considered one of the biggest three such providers of supply chain software, along with SAP and Oracle.
   The rumored talks come several months after Moody’s warned of high debt concerns for JDA’s parent company RP Crown.
   JDA’s platform and customer base has largely been built on major acquisitions and mergers the past decade, most notably its acquisitions of transportation management system (TMS) provider i2 and Manugistics, and its merger with warehouse management system (WMS) provider RedPrairie.
   While Moody’s pointed to more than $2 billion in debt for the JDA, the ratings service also noted that the company has a stable base of licensed revenues from its large catalog of customers, and that both its licensed and subscriber-based products would grow in the mid to high single digits this year.
   However, Moody’s called JDA’s debt levels “unsustainable.”
   What Honeywell sees in a potential acquisition isn’t clear at the moment, though there’s no obvious crossover with current division. Last month, Honeywell acquired the warehouse automation technology company Intelligrated for $1.5 billion, and that acquisition could pair nicely with JDA’s WMS product.
   More likely, Honeywell sees JDA as a standalone unit that would feed into the company’s other divisions. JDA touches its customers at several key points in the supply chain, from demand sensing, to supply chain design, to procurement, shipment execution, visibility and warehouse management.
   Earlier this year, JDA introduced a suite of more basic tools (called Stratus) for transportation management and other functions to address a market that it had largely ignored for years – the small and medium-sized enterprise (SME) market.
   SMEs have been targeted by a number of cloud-based TMS and WMS providers that offer subscription-based, easy-to-implement systems that offer a bit more appeal that JDA’s flagship tools, which offer robust optimization but can take time to implement and fully leverage.
   And, in general, the TMS market has become very fragmented in recent years as these cloud-based software-as-a-service providers offer market options that didn’t exist before JDA and Oracle started consolidating TMS providers in the last wave of development of the market.
   JDA not only faces competition from pure TMS providers, but also from 3PLs with their own TMS, or broader control tower and purchase order management systems. The Scottsdale, Ariz.- based company white labels its products to 3PLs – indeed, the company made it a priority two years back to better penetrate the 3PL market.
   But many logistics companies either offer proprietary systems or white label a solution from one of JDA’s competitors, and competition in the technology market is significant, and threats grow daily from startups looking to change the way shippers and 3PLs procure and manage freight.
   Not many pure supply chain software providers, however, have the depth and breadth of JDA’s systems. And the company’s value becomes especially apparent in the context of growing e-commerce demand. In 2014, JDA started focusing its message squarely on the value its solution brought companies that are pressure to fulfill multiple channels (to store, to distribution center, direct to customer) in a profitable way.
   The value of marrying the company’s TMS and warehouse management solutions with its inventory management and in-store point of sale solutions is clear.
   Whether Honeywell sees JDA as a potential standard bearer for its larger industrial automation efforts, or a standalone business that needed some rationalization is unclear for now. But the $3 billion valuation should excite other supply chain software providers. For context, GT Nexus, a provider of global visibility, execution and supplier management software, was acquired by Infor for $675 million in 2015.

We are glad you’re enjoying the content

Sign up for a free FreightWaves account today for unlimited access to all of our latest content

By signing in for the first time, I give consent for FreightWaves to send me event updates and news. I can unsubscribe from these emails at any time. For more information please see our Privacy Policy.