Readers may recall that in December, Supply Chain Matters updated our readers on the failed acquisition by JDA Software for i2 Technologies. In this previous update post, I indicated my view that i2’s senior management had but two strategic options in light of the failed acquisition I viewed those options as either a re-initiation of talks with other potentially interested acquirers, or decide to move-on with operations until the financial climate improves. The company also needed to find a way to appease existing investor’s debt, along with employees concerns.
It now appears that i2’s strategy is to generate as much cash as possible, from as many sources as possible. On December 31, i2 closed the year with $243.8 million in cash vs.$228M in Q3, a hefty sum for any mid-sized software companies today. Almost $100 million of this cash came from a previous $80 million patent infringement settlement with SAP, and a $20 million settlement with JDA Software for non-performance of the prior acquisition attempt. The company also announced an agreement to payoff certain bondholders.
The latest news from i2 is that they have filed yet another patent infringement suite, this time targeting Oracle. The company alleges that Oracle has infringed on 11 patents related to various aspects of supply chain planning software, and is filed with the same Texas friendly court as occurred with the SAP infringement lawsuit a few years ago. There were many who doubted that i2 would prevail in its IP lawsuit, and SAP ultimately decided that settlement was the best course.
So perhaps i2’s current senior management is embarking on a strategy to generate cash in many dimensions. Heck, if you can get $80 mil.from SAP, who knows what you can get from Oracle.
What comes next for i2 will be interesting to observe since having lots of cash leads to rather interesting strategic options, especially if you get away with suing two of the biggest players in supply chain software.