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i2 gobbles up Aspect for $9.3B

In the largest software deal ever, high-flying i2 Technologies (Nasdaq: ITWO) said Monday it would acquire Aspect Development (Nasdaq: ASDV) in a stock swap valued at $9.3 billion.

It didn't take long for i2 to eclipse Computer Associates' (NYSE: CA) purchase of Sterling Software Inc. (NYSE: SSW) for $4 billion. CA announced the largest software deal just a few weeks ago.

I2, which has been one of the main stocks behind the Nasdaq run to 5,000, said it will exchange 0.55 share for each Aspect share. The deal accounts for Aspect's 2-for-1 stock split, effective today. Aspect shareholders will get a 35 percent premium to Aspect's closing price of 170 Friday.

Shares of both i2 and Aspect have soared in recent months on the business-to-business e-commerce buzz. I2 offers the TradeMatrix B2B marketplace and recently announced a big deal with IBM (NYSE: IBM) and Ariba (Nasdaq: ARBA).

In a statement, i2 said the combined companies will be the largest provider of software and content for B2B. "With 4,000 employees and a research and development budget of nearly $1 million per business day, the combined company has by far the largest base of technology and expertise to meet customers' needs and expectations," the company said.

Under the terms of the deal, shareholders of Aspect, based in Mountain View, Calif., will own about 18 percent of the combined company. For the transaction, i2 plans to issue or reserve for issuance about 44.9 million shares of common stock.

I2, based in Dallas, also announced on Monday that it plans to buy privately-held software and services provider Supplybase Inc. for $380 million in stock.

I2 said both deals are expected to be neutral to 2000 cash earnings and accretive to 2001 cash earnings. The transactions will result in "substantial one-time charges along with ongoing substantial amortization of intangibles,'' the company said.

At closing, Aspect will become a subsidiary of i2 with Romesh Wadhwani, Aspect chairman and CEO, becoming vice chairman of i2 and a member of i2's board of directors.