Honeywell in talks to buy JDA Software Group for around $3 bn

US conglomerate Honeywell International Inc is in talks to buy supply chain management software company JDA Software Group Inc, for around $3 billion, including debt, Reuters yesterday reported, citing people familiar with the matter.

The potential acquisition comes a month after Honeywell agreed to buy privately-held supply chain and warehouse automation company Intelligrated Inc, for $1.5 billion in order to strengthen its automation portfolio. (See: Honeywell to buy supply chain, warehouse automation firm Intelligrated for $1.5 bn)

Private equity firm New Mountain Capital, JDA Software's majority owner, has already explored a sale of the company to its peers, and there is no certainty its latest talks with Honeywell will result in a deal, the report said.

New Mountain had acquired JDA Software in 2012 for $1.9 billion and later merged it with Georgia-based supply chain, workforce and all-channel commerce software company RedPrairie.

Founded in 1985 in Cleveland, Ohio by James Armstrong and Frederick Pakis, JDA Software provides supply chain management, manufacturing planning, retail planning, store operations and collaborative category management software.

The Arizona-based company has more than 4,000 companies as its customers in the manufacturing, distribution, transportation, retail and services industries.

Its subsidiaries include RedPrairie, i2 Technologies, Manugistics, E3, Intactix, and Arthur.

Reuters said that the company has been struggling under the burden of more than $2 billion in debt and credit ratings agency Moody's Investors Service had this year warned that JDA Software's debt levels might be unsustainable unless there is a sizeable equity infusion or debt reduction.

Honeywell, a Fortune 500 company, is an US multinational conglomerate producing several commercial and consumer products, engineering services and aerospace systems.

The New Jersey-based company operates three business units, known as a Strategic Business Unit–Aerospace, Automation and Control Solutions, and Performance Materials and Technologies.

It generated net profit of $4.7 billion last year on sales of $38.58 billion.