PeopleSoft to Buy J.D. Edwards for $1.7B
By MICHAEL LIEDTKE
SAN FRANCISCO (AP) — Business software maker PeopleSoft Inc. on Monday said it is buying rival J.D. Edwards & Co. in a stock swap initially valued at $1.7 billion.
The deal, expected to close in the third or fourth quarter, will create the world’s second largest maker of software that helps companies manage their personnel departments and other back-office operations.
The combined company, which will retain the PeopleSoft name, will have about $2.8 billion in annual revenue, 13,000 employees and 11,000 customers in 150 countries.
Only Germany-based SAP will be larger in the business software niche known in corporate America as “enterprise applications.”
As frequently happens to a company making a major acquisition, Peoplesoft’s shares dropped Monday’s trading, decreasing 87 cents to $15.52 on the Nasdaq Stock Market. The decline lowered the value of the deal to $1.6 billion.
J.D. Edwards’ surged $1.32 to $13.13 on the Nasdaq Stock Market.
With their union, Pleasanton-based PeopleSoft and Denver-based J.D. Edwards are betting that they have complementary strengths that will help them weather a high-tech spending slump now entering its third year.
Although PeopleSoft and J.D. Edwards make similar products, they have traditionally focused on different markets.
PeopleSoft – the larger of the two companies with $1.9 billion in revenue – sells mostly to big companies specializing in services.
J.D. Edwards, with annual revenue of $886 million, primarily peddles its products to midsized manufacturers.
PeopleSoft managed to avoid the economic malaise during 2001, and its shares soared above $50 a little over two years ago as companies snapped up a suite of business software designed to run on the Internet. But the company has been stuck in a funk for the past year that has depressed its once high-flying stock.
—–
On The Net:
More science, space, and technology from RedNova
Copyright © 2003 The Associated Press. All rights reserved. The information contained in the AP News report may not be published, broadcast, rewritten or redistributed without the prior written authority of The Associated Press.