Blackstone to Back JDA Software

Blackstone Group LP on Friday said it took up a proposal from New Mountain Capital to pump $570 million into JDA Software Group Inc. in a deal that gives the firm a minority stake in the supply-chain management software provider that was close to a sale to Honeywell International Inc.

The Wall Street Journal on Thursday reported New Mountain last week reached out to fellow New York firm Blackstone, proposing a structured financing deal in exchange for preferred stock and equity warrants in JDA that would entitle the private-equity giant to a 40% stake in the company and guarantee a return of 7.5%.

New Mountain, the company's majority shareholder since JDA's merger with RedPrairie in 2012, will remain so.

JDA said the new capital will be used to fuel product innovation, including cloud-based development. The equity investment is expected to be completed by early in the fourth quarter. It will have no cash interest costs for JDA and will be used to retire existing debt and reduce its interest expense by $70 million a year.

JDA has about $2 billion in outstanding debt, representing about nine times its earnings before interest, taxes, depreciation and amortization, according to people familiar with the matter.

The deal was contingent on the outcome of JDA's negotiations with Honeywell, an industrial conglomerate that makes products ranging from air conditioners and commercial boilers to airplane-cockpit controls and industrial gloves. Honeywell had been close to sealing a deal to acquire JDA for about $3 billion, including debt.

Write to Anne Steele at [e-mail] and Amy Or at [e-mail]

(END) Dow Jones Newswires

August 19, 2016 10:05 ET (14:05 GMT)

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