The JDA Software Group has completed an agreement with funds managed by Blackstone and New Mountain Capital (NMC) to effect a recapitalisation of the company through a $570m equity investment.
The fresh capital injection will be used to boost JDA’s product innovation and growth plans to launch next-generation cloud-based solutions.
With this investment, JDA will be able to build its portfolio of supply chain and omnichannel retail solutions.
The new equity investment is expected to be closed by early fourth quarter of this fiscal year, after meeting customary closing conditions.
JDA CEO and chairman Bal Dail said: “This investment will accelerate our future growth plans and vision for the business. It not only reaffirms our vision, financial performance, and innovation track record, but also our reputation as the market leader in our space and our unique ability to enable customers to capture opportunities presented by today’s digital transformation.
"This investment will accelerate the development of our SaaS-based solutions and allow us to develop innovative new solutions on Google Cloud Platform while enhancing our current large R&D investment in our existing products.
"No-one spends more on supply chain-focused R&D than JDA, and we look forward to continuing to innovate for customers through our JDA Labs and our best-in-class product development teams.”
This new equity investment will have no cash interest costs for JDA. It will be used to close existing debt and reduce JDA’s interest expense by $70m a year.
The remaining debt will have no operating covenants and the first maturity will not be until 2023.
NMC is JDA's majority shareholder since the latter's merger with RedPrairie in 2012. It will be investing in the equity in addition to Blackstone, as well as remain as the company’s majority shareholder after the investment.
JDA is a provider of integrated retail, omnichannel and supply chain planning and execution solutions for more than 4,000 customers worldwide.
The solutions help retailers to reduce costs, increase profitability and improve collaboration.