Is a Honeywell Bid for JDA Software Imminent?

Rumors that Honeywell (NYSE: HON) was discussing the acquisition of supply-chain software firm JDA Software first surfaced on Aug. 8, according to “people familiar with the matter.” Word had it the price being considered was about $3 billion, including JDA Software’s $2 billion plus in debt.

Neither Honeywell, JDA Software, nor its largest shareholder, New Mountain Capital, are commenting. However, the latest murmurings suggest an announcement confirming the deal could come as early as Monday. Though Honeywell is widely known as an industrial conglomerate, bringing JDA Software into the fold would be in line with CEO David Cote’s expressed plans to expand his company’s suite of software-driven manufacturing and supply chain solutions.

Just last month, Honeywell announced a $1.5 billion deal to buy supply-chain and warehouse-automation software provider Intelligrated. And according to Cote, half of Honeywell’s 23,000 engineers are already focused on developing software. Though JDA Software, with its significant debt load, may not seem the most attractive of acquisitions — it was recently downgraded by Moody’s due to “risk of impairment” unless it reduced debt or found a capital infusion — there’s no faulting Cote’s decision to enhance Honeywell’s manufacturing-related technologies.

The manufacturing industry has been one of the earliest adopters of Internet of Things solutions, and is expected to lead the charge as the world becomes increasingly connected. Of the four industries expected to generate over half the estimated $14.4 trillion in annual sales IoT will account for by 2022, manufacturing’s 27% share is head-and-shoulders above the 11% retail will garner, and three times that of information services and the finance and insurance industry’s projected 9% shares. …read more

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Category: HON

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