i2 plans to buy Aspect Development, a competing maker of business-to-business software, for $9.3 billion in what may be the largest merger ever in the software industry, the companies said today.
Under the terms of the stock-for-stock deal, the companies will combine their business-to-business (B2B) technologies and services to expand the i2 TradeMatrix marketplace. TradeMatrix provides technology and services that deliver e-commerce content, product design and direct procurement software, the companies said in a statement.
i2 was down $18, or 9 percent, at $190, while Aspect climbed $11.75, or 14 percent, to $96.75 on news of the deal.
Tom Harwick, an analyst with Giga Information Group, said today's news is no surprise. This is the natural evolution of the companies' relationship, which includes an equity investment by i2 in Aspect, collaboration on projects during the last six months, and joint marketing deals, said Harwick.
"This is a good move. Aspect provides component supply-management techonology, which gives developers the ability to design their products for better movement through the supply chain. This is real good for i2 customers," Harwick said.
The move is also telling of i2's focus. "This means i2 is getting serious about direct individual procurement," said Laurie Orlov, an analyst with Forrester. "If you couple this with its partnerships with IBM and Ariba, where it gets services and consulting from IBM and a strong procurement platform from Ariba, you get a full...business-to-business procurement package now, where Aspect provides the content and catalog-aggregation technology."
The acquisition is the latest in a string of deals in the growing market for software and services that connect companies with their suppliers and customers. Last week, Internet Capital Group, a venture firm that invests in Web companies, said it would buy a majority stake in privately held software firm RightWorks for $657 million to fortify its position as a leading provider of online marketplaces.
at a glance
HQ: Dallas, TX
CEO: Sanjiv Sidhu
President: Gregory Brady
Annual sales: $352.6 Million
Annual income: $23.5 Million
Market cap: $29.6 Billion
Date of IPO: Apr 1996
i2 also said it will buy Supplybase, a provider of technology for Web-based product design and detailing of custom parts and assemblies, the company said today.
Supplybase delivers content about more than 100,000 suppliers. Under the agreement, i2 will issue or reserve for issuance approximately 1.8 million shares of i2 common stock, valued at approximately $380 million, for all of the outstanding stock and stock options of Supplybase.
i2 will exchange 0.55 share for each Aspect share after Aspect's 2-for-1 stock split, the companies said. Aspect shares were expected to start trading on a post-split basis today.
Aspect shareholders will own approximately 18 percent of the combined company, which will employ about 4000 people.
Founded in 1988, i2 is a provider of business-to-business and business-to-consumer software.
Aspect, headquartered in Mountain View, Calif., provides collaborative software for business-to-business marketplaces, which allow business partners and suppliers to do online transactions.