One of the top priorities of any manufacturer is efficient management of the variable demands made on its supply chain. There is an outfit in Dallas that has been helping some of the biggest firms in the world streamline the process for nearly twenty years.

i2 Technologies (NASDAQ: ITWO) provides supply chain management software that helps manufacturers boost operating efficiency, work with customers and suppliers, and administer electronic marketplaces. The firm also offers consulting, maintenance and training services. Clients include such manufacturing leaders as 3M (NYSE: MMM), General Electric (NYSE: GE) and Honeywell International (NYSE: HON).

The company pleased investors earlier in the month, when it reported Q3 EPS of 24 cents and revenues of $66.5 million. Analysts had been expecting 12 cents and $63.7 million. In discussing the results, the CEO cited continued momentum in the services business and significant customer wins for the firm's retail and logistics solutions. Management also guided FY07 EPS to 82-92 cents (80 cent consensus) and FY07 revenues to $263.5-266.5 million ($261.87M consensus). JMP Securities subsequently reiterated its "market outperform" rating on the shares and boosted its price target to $22.

Despite the plunge in the markets Thursday, the shares of i2 Technologies Inc. (NASDAQ: ITWO) were able to post a 6.6% increase to $18.08. The company, which develops supply chain software, announced its Q3 results. Actually, revenues fell $4.9 million to $66.4 million and net income was $4.5 million, or $0.17 per share.

But what got investors excited was i2's announcement that it is exploring strategic alternatives; that is, the company is thinking of selling out. JPMorgan Chase (NYSE: JPM) is the investment banker on the assignment.

In light of the recent spurt of tech M&A – such as Oracle Corp.'s (NASDAQ: ORCL) bid for BEA Systems (NASDAQ: BEAS) – it seems like a good move. Besides, i2's shareholders seem to be antsy. Keep in mind that hedge fund SAC is a major holder.

However, the major software vendors don't appear willing to pay premium prices. After all, the software seems to be maturing. Moreover, private equity firms have much less firepower (because of the credit crunch).

So, in the case of i2, don't expect a high-priced deal – if one even gets done.

Tom Taulli is the author of various books, including The Complete M&A Handbook and The Edgar Online Guide to Decoding Financial Statements. He also operates DealProfiles.com.