Sunday, November 23, 2008

Value of an efficient Supply Chain

This video ad from i2 technologies presents a holistic picture of the value that an efficient supply chain brings to this greater world that we live in.

i2 Technologies is a supply chain management software and services company, founded in 1988 by Sanjiv Sidhu and Ken Sharma. It grew rapidly during the late 90's to reach its zenith at the height of the dot com boom in 2000, when it crossed the $1B revenue mark. Later on in 2001 became infamous for its software not living up to promises, resulting in complaints by high-profile customers such as
Nike and Siemens. In 2003, Securities and Exchange Commission launched a full-blown investigation into it's accounting practices. It's revenues fell very rapidly between 2002 to 2005. Finally in Aug 11, 2008, JDA Software announced that they would acquire i2 Technologies for $346 million. Back in 2000, working as ebusiness analyst intern for a B2B ecommerce firm, I followed them and host of other players in this space like Manugistics very closely. You could say companies like i2 and Manugistics got me interested into the fascinating world of supply chain. I think this acquistion is a pivotal moment in supply chain software industry because it brings to an end an era of fierce competition in this space.


Update 12/8/2008

Less than three months after JDA announced it planned to acquire i2, for approximately $346 million, it appears that the deal is off the table. Last week, i2 said it has officially terminated its Agreement and Plan of Merger with JDA, adding that it expects to receive a non-refundable $20 million termination fee from JDA by Tuesday, December 9. According to an i2 statement issued, i2 received a written proposal from JDA to amend—or lessen—the common share consideration in the merger agreement below the $14.86 per share price. And after reviewing this proposal, i2’s board of directors deemed this proposal was “not in the best interests of i2’s stockholders to pursue it.”

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