LogicTools is a fast growing and profitable leader in supply chain network design and planning solutions as well as an innovator in the emerging inventory optimisation space that industry analysts believe is strategic and essential to the next generation of supply chain management applications. In its Supply Chain Management Applications Report, 2005-2010, AMR Research noted that supply chain network design and inventory configuration, which includes inventory optimisation, were two of the top growth areas for 2005 (the latest data available) at 21 percent and 35 percent, respectively. These trends are continuing, fueled by globalisation, high transportation costs and growth in off-shoring.
The acquisition is expected to add LogicTools' more than 200 customers to ILOG's installed base of Global 500 companies in the consumer goods, retail and manufacturing markets. In addition, ILOG will acquire LogicTools' intellectual property, allowing the company to offer products and services that complement ILOG's recently introduced planning and scheduling applications. An ILOG independent software vendor (ISV) partner, LogicTools has used ILOG's optimisation technology in its products for more than five years.
As part of the acquisition, ILOG will gain a research and development (R&D) site in Eugene, Oregon and an office in Chicago. All of the 43 LogicTools employees are expected to be made offers of employment to join ILOG. LogicTools' Chairman and Co-founder David Simchi-Levi will stay on as a consultant to ILOG. Co-founder Edith Simchi-Levi will continue as vice president of operations during the transition, after which she will assume a supply chain marketing role within ILOG.
LogicTools' customers and partners will continue toÂ receive aÂ high level ofÂ service and support, which will be enhanced byÂ ILOG's worldwide sales and support network and corporate resources.Â ILOG intends to leverage its significant R&D and marketing efforts to continue the evolution of LogicTools products and services.
"Given ILOG's leadership position in resource optimisation products and its long history of success in the supply chain market as a strategic technology provider to both corporations and software companies, including LogicTools, I can't think of a better company for our customers and employees to join," said David Simchi-Levi. "ILOG and LogicTools' complementary solutions will bring to the market the most advanced supply chain optimisation capabilities. Our customers and partners will continue to receive the quality of service we are known for and LogicTools' employees will join a company with compatible culture and expanded opportunities for growth."
"This acquisition will significantly strengthen one of the three pillars of our strategy - supply chain planning and scheduling applications. The complexity and risks in the supply chain market have increased over time, requiring advanced decision support tools. The acquisition of LogicTools underscores our commitment to address the new challenges faced by global supply chains, and positions us to become a leading provider of supply chain analytics applications," said ILOG Chairman and CEO, Pierre Haren. "I know LogicTools well, and have the highest esteem for its technology and employees. Strong technical and sales synergies exist between our organisations. I'm also looking forward to meeting LogicTools' partners and customers and to helping ensure the fine tradition of customer care that LogicTools has established."