Aug. 12--Scottsdale-based JDA Software Group said Monday it will buy Dallas-based i2 Technologies, which provides consulting, technology and managed inventory supply services for retailers.

The larger JDA, which also creates and markets software for managing inventory and suppliers, will ante up $346 million in cash for the purchase. The deal is expected to close before year's end.

JDA Software CEO Hamish Brewer said in a conference call with investors that the merged company will provide a combined $635 million in annual revenue and more than 6,000 customers.

Because i2 provides many subscription services and ongoing maintenance, 47 percent of the combined company's revenue will be recurring, he said. Brewer said here is some overlap in the two companies' services, but the customers and operations are mostly complementary, not competitive.

The purchase will help JDA Software further its goal to become completely vertically focused, Brewer said.

For i2, which has been struggling, the merger will provide bulk and solid financial backing, said CEO Pallab Chatterjee.

"In an industry that continues to consolidate, scale matters," said Chatterjee. "In that regard, the combination of these two companies will create one of the world's strongest, best-ofbreed software solution providers focused on the global supply chain."

The deal will provide cost savings of $20 million within the first 12 months, said Kristen Magnuson, JDA's chief financial officer, and provide further efficiencies in the future as the company sheds "redundant buildings and staff."

She said the company would combine JDA's Dallas-based sales staff and i2's Dallas headquarters and sales staff into a single location and then "right-size" the operation to eliminate the extra headquarters function in Texas.

Brewer said he is not announcing which employees will be retained when the companies are combined but will discuss staff integration plans about six weeks after the deal closes.

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