The number of major enterprise software players out there decreased by one today as PeopleSoft Inc. announced a deal to buy rival J.D. Edwards & Co. in a deal valued at about $1.7 billion.
The deal, which has been approved by the boards of both companies and is expected to close in the third or fourth quarter, gives PeopleSoft, of Pleasanton, Calif., stronger offering and an established customer base in the manufacturing vertical. PeopleSoft will expand its presence in 20 vertical industries in total, officials from the company said.
Denver-based J.D. Edwards also brings a strong presence among mid-sized companies. It will become a subsidiary of PeopleSoft. The combined companies will have about 13,000 employees.
Both companies will plug holes in their overall product offerings, officials said. After the deal closes, PeopleSoft will have an enterprise unit, a mid-market unit and an AS/400 unit—the latter two based on J.D. Edwards offerings.
PeopleSoft Chief Marketing Officer Nancy Calwell said that J.D. Edwards, as the leader in the mid-market business applications space with strength in key verticals like manufacturing and distribution, would bring synergies to PeopleSoft, which is stronger in the enterprise space and services verticals like financial services, health care, education, communications and government.
"Together, well have incredible growth opportunities," said Calwell. "As we move forward, well bring the strengths of our respective applications to each other."
"We have a good set of products but we dont know how to sell them at the high end," said J.D. Edwards CEO Bob Dutkowsky, citing his companys strategic networking optimization products as an example. PeopleSoft e-procurement, sourcing and Sarbanes-Oxley compliance software are examples of products that could be sold to J.D. Edwards user base, he added.
Integration of the two companies offerings will not be difficult since they are both based on Internet standards, according to Dutkowsky.