Dive Brief:
- Honeywell International is considering acquiring JDA Software Group, a privately held supply chain management technology business, for approximately $3 billion, Reuters reported Aug. 8.
- JDA boasts over 4,000 clients worldwide and recorded the company's highest year-over-year growth due to a 62% growth in software sales and 44% growth in software-as-a-service sales. However, the company is reportedly struggling with more than $2 billion in debt.
- Just over a month ago, Honeywell's automation division announced a similar $1.5 billion purchase of Intelligrated, a supply chain and warehouse logistics firm.
Dive Insight:
A recent JDA/SC Digest survey of 203 supply chain professionals suggests nearly 80% of organizations are looking to invest in supply chain digitization technologies within the next three years.
At the same time, only 10% of the respondents had developed a plan to do so, leaving the floodgates open for intense competition by software sales companies, including Honeywell, looking to enter the market.
Honeywell's automation and control solutions division raised $14.1 billion in sales last year and the company is looking to expand its capabilities as e-commerce growth raises the demand for more efficient supply chain processes.
Honeywell COO and soon-to-be CEO Darius Adamczyk expects software solutions to be the medium by which the company exploits the increased demand, he told the Wall Street Journal in June. As a result, the company is ramping up its tried-and-true acquisition strategy to expand its supply chain offerings.