i2 Technologies, a provider of e-marketplace portal and execution software, is on a content buying spree, snatching up Aspect Development in a $US9.3 billion stock-for-stock agreement, and Supplybase, maker of web-based product design and sourcing of custom parts and assemblies.
The agreement will combine content and analysis with transaction capabilities, officials from the vendors said on Monday.
By acquiring and then integrating content-oriented offerings, i2 is providing end users with much-needed content, said Pierre Mitchell, an analyst with AMR Research in Boston.
"i2's acquisition of Aspect has filled in the content hole of how you're going to do strategic sourcing," Mitchell said. With the content support, i2 now has "the strongest strategic sourcing solution out there", he said.
The question now becomes whether i2 can integrate the product lines, though the prospect of that is good, said Mitchell, who noted that the two companies have worked together before. "It's going to take some time, but I think the integration should be relatively straightforward," he said.i2's competitors should look at this "as a disconcerting move", Mitchell said, citing the combination of content and transaction support. The i2 acquisitions will allow the company to meet end users' expectations of more advanced content solutions that include supplier analysis, commodity rationalisation, part rationalisation, supplier management, and design optimisation, he said.
The agreement specifies that i2 will acquire all of the outstanding stock and stock options of Aspect, company officials said. The outstanding share of Aspect will be exchanged at a ratio of 0.55 shares of i2 common stock for each share of Aspect stock. This will include Aspect's 2-for-1 stock split, effective from Monday. The exchange ratio represents a 35 per cent premium over Aspect's closing stock price on Friday.
For the Aspect merger i2 will issue or reserve for issuance approximately 44.9 million shares of i2 common stock. Calculated from i2's closing price on Friday, the total value of the transaction is approximately $US9.3 billion, i2 officials said.
Aspect is slated to become a subsidiary of i2, with Romesh Wadhwani, Aspect chairman and CEO, taking the helm as vice chairman of i2 and a member of i2's board of directors.
In the Supplybase acquisition, the agreement specifies that 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 officials said.