In a move that can help retailers better support demand-chain software applications with synchronized product information, JDA Software Group Inc. has agreed to acquire QRS Corp., a company known for its extensive web-based retail industry catalog of product data for general merchandise and apparel.
“The blending of QRS’s product catalog and automated synchronization technology into JDA’s retail management portfolio should give JDA customers even greater value-chain operating efficiencies—all from a single platform,” says Rob Garf, retail industry analyst with AMR Research Inc. “JDA customers should view this acquisition as a positive extension of JDA’s capabilities and seriously consider the benefits of integrated product data management and synchronization.”
JDA offers a suite of integrated applications for retail management functions such as inventory management, pricing optimization and collaborative sales forecasting with suppliers. By integrating these and other applications with QRS’s retail industry catalog, which contains synchronized retailer-supplier data on more than 100 million unique items, JDA expects to make its applications more robust with improved data. QRS also offers other collaborative commerce applications.
“QRS offers one of the world’s leading trading and product information management networks,” said JDA president and CEO Hamish Brewer. “We intend to seamlessly merge this data with existing JDA products to provide a new class of applications that are inherently data-rich, collaborative and connected.”
In the all-stock transaction, Scottsdale, AZ-based JDA has agreed to pay QRS about $100 million according to JDA’s current stock price, which was trading at $12.66 at mid-day Friday, up about 10 cents since Thursday’s announcement of the acquisition. The combined companies will have revenue of more than $340 million but a net loss of $1.7 million, according to financial records for the four quarters ended March 31, which the companies cited in their announcement about the acquisition. For that period, JDA reported net income of $4.4 million on revenues of $221.3 million; QRS reported a net loss of $6.1 million on revenues of $123 million.
Despite the combined net loss, JDA says it expects the acquisition will add to JDA’s earnings next year because the combined companies will be positioned to both increase revenue and reduce overall operating costs. JDA expects to see continued declines in QRS’s EDI value-added-network services, which represented about half, or $66 million, of its revenue over the past 12 months, said JDA CFO Kris Magnuson.
Together, the two companies will serve more than 14,000 customers. "With advancements in radio frequency identification and other collaborative initiatives, the industry is heeding the call for increased efficiency and accuracy in the exchange and update of item and supply chain information," Brewer said. "While QRS is the de facto standard for data synchronization in the U.S. general merchandise and apparel industry, we see a huge growth opportunity in other world regions and market segments, in particular food and consumer packaged goods."
JDA will also benefit from QRS’s business model of producing mostly recurring revenue, and will also save $20-$25 million in operating costs within the first 18 months, Magnuson said.
The acquisition of QRS leaves hanging the future of QRS’s supply chain sourcing software, which QRS has not been actively marketing in recent months but continues to develop and support for current customers. JDA has not said what it might do with the sourcing application.
Garf, however, suggests sourcing software customers consider alternatives. “It’s time for QRS sourcing clients, already frustrated with QRS’s lack of focus on the product and lack of positive direction from JDA, to consider other sourcing systems,” he says.
JDA will continue to be headed by Brewer. The companies announced that two QRS executives will join JDA. James G. Rowley, QRS senior vice president for global engineering, support and technology and CTO, will join JDA as senior vice president of operations, and become part of JDA's Product Strategy Council. Ray Rike, QRS senior vice president for
worldwide sales and field operations, will join JDA as senior vice president, collaborative solutions. No decisions have been made yet regarding other QRS executives, including CEO Liz Fetter, a spokeswoman says. QRS will continue to operate from its headquarters in Richmond, CA.
Back...
