New Mountain Capital LLC, the primary stake holder at JDA Software has earlier attempted to sell the company. There is no guarantee that these talks could result in a deal.
According to sources familiar with the matter at hand, Honeywell International Inc. is holding acquisition talks with JDA Software Group Inc. in a deal valued at nearly $3 billion, including debt. The move only underlines Honeywell International’s drive to diversify its holdings.
Sources have disclosed that New Mountain Capital LLC, the firm which has the majority stake in JDA Software, has already explored a sale of the company to potential private equity firms, thus there is no guarantee that this latest talk acquisition of acquisition could actually result in a deal.
While Honeywell is a U.S. industrial conglomerate, JDA software Group is a U.S. based retail and supply chain management company having more than 4,000 corporate clients worldwide.
Significantly earlier this year, Moody’s Investor Service had warned that JDA Software was struggling having to handle debts of $2 billion. Moody’s had warned that the debt levels could be unsustainable and the risk of impairment in its capital structure was very high unless a sizeable infusion of equity took place or debt levels reduced.
Exacerbating its woes was the fierce competition among vendors in the supply chain planning, warehouse and transportation management software.
Although, this scene was unfavourable for JDA Software, for Honeywell it was just the scenario it was looking for so as to beef up its sensing and productivity solutions division. The rising trend of ecommerce has only fuelled the demand for logistics and warehouse management software.
Sources have requested anonymity since the negotiations are on-going and are thus confidential.
When asked to respond to requests for comments, Honeywell, JDA Software declined comment.