After a lackluster 2006, JDA Software Group (NASDAQ:JDAS) has surged 31% this year. It got a big boost from its $211 million acquisition of rival Manugistics in April 2006, and the deal should remain a strong growth driver going forward.

JDA's software helps its 5,500 customers, including PetSmart (NASDAQ:PETM), Office Depot (NYSE:ODP), and Borders (NYSE:BGP), manage their supply chains more efficiently.

In its fiscal first quarter, JDA increased sales nearly 90% to $90.7 million, while its license revenues increased by more than 200%, to $61.5 million. As I've noted before, license revenues are a particular plus, since they often lead to continuing maintenance and service fees. JDA's bottom line was also impressive; net income increased more than tenfold, to $5.4 million or $0.16 per share.

Last year, CEO Hamish Brewer called his company's deal for Manugistics a "perfect match," predicting resultant cost savings of $25 million to $30 million within its first year. JDA even attracted a $50 million investment from savvy private equity firm Thomas Cressey to carry out the transaction. So far, Hamish has made good on his promise. JDA picked up two key product lines from Manugistics, and it's been aggressively cross-selling them into its channel.

The company faces intense competition from SAP (NYSE:SAP) and Oracle (NASDAQ:ORCL), but it's protected by its strong offerings and deep footprint in the retail sector. Besides the Manugistics transaction, JDA is also enjoying better results from a revamp of its sales organizations. It's a nice snowball effect that should continue for several quarters to come.

Further well-connected Foolishness:

PetSmart is a Stock Advisor pick, while Borders is an Inside Value selection. Try any of our Foolish newsletters free for 30 days.

Fool contributor Tom Taulli, author of The Complete M&A Handbook, does not own shares mentioned in this article. He is currently ranked 3,449 out of 27,827 in CAPS.