Blackstone group LP (BX.N) has supplied a financing plan to
assist debt-weighted down U.S. deliver chain management employer JDA software
group Inc, giving it an alternative option to promoting itself to Honeywell
international Inc (HON.N), humans familiar with the matter said.
The flow illustrates how Blackstone, the arena's largest
non-public fairness firm, pursues innovative approaches to at ease offers
whilst traditional leveraged buyouts are less appealing financially amid
competition from organizations inclusive of Honeywell.
JDA's majority owner, buyout firm New Mountain Capital LLC,
now has to decide whether or not to sell the employer outright to Honeywell for
around $three billion, or stay with it and are trying to find to boost up its
turnaround with new capital from Blackstone that would permit JDA to spend
money on its income force and products.
Blackstone has proposed to JDA a so-referred to as
payment-in-kind financing deal whose coupon could be paid with additional
securities, some of the people stated. The financing would include equity
warrants that could provide Blackstone a giant minority stake in the
corporation, the humans brought.
even as JDA's debt pile of greater than $2 billion is
hampering its capability to spend money on its increase, the company does no
longer ought to make vast debt payments for the subsequent two years and is in
compliance with its mortgage covenants, the human beings said. New Mountain may
determine not to pursue any transaction in any way, the human beings
introduced.
The resources asked now not be named because the matter is
personal. Blackstone and New Mountain declined to comment, at the same time as
Honeywell and JDA software did no longer right away respond to requests for
remark.
Honeywell has been on an acquisition hunt, having announced
in 2014 a aim of $10 billion in acquisitions by means of the stop of 2018.
ultimate month, it boosted its automation portfolio,
agreeing to accumulate Intelligrated Inc, a U.S. distribution structures and
logistics organisation, for $1.five billion.
Like Intelligrated, Honeywell does deliver chain for
distribution and manufacturing groups, even though a large part of JDA's
business is supply chain software program for stores, which has now not been
Honeywell's traditional cognizance.
New Mountain took JDA software program non-public in 2012
for $1.nine billion after which merged it with any other company referred to as
RedPrairie. due to the fact then, the enterprise has struggled with integration
problems.
Exacerbating JDA software's woes has been fierce opposition
amongst software program companies for products in deliver chain making plans,
transportation and warehouse control.
still, the agency has lately suggested some encouraging sale
numbers. in the first half of the yr the enterprise had its highest growth in
new customers due to the fact that its merger with purple Prairie.
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