KKR explores $5 billion sale of Epicor Software - sources

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(Reuters) - Buyout firm KKR & Co Inc (KKR.N) is exploring a sale of Epicor Software Corp that could value the U.S. enterprise resource planning software provider at close to $5 billion, including debt, people familiar with the matter said on Thursday.

Companies such as Epicor that generate recurring revenue through business software sales have been popular targets for the private equity industry. The sources said that Epicor will likely attract interest from other buyout firms.

KKR is working with an investment bank on an auction for Epicor, the sources said, cautioning that no deal is certain and requesting anonymity because the matter is confidential.

KKR declined to comment, while Epicor did not respond to a request for comment.

Based in Austin, Texas, Epicor is a provider of application software to mid-sized companies in various retail, distribution and manufacturing sectors. It has 12-month earnings before interest, taxes, depreciation and amortization of around $350 million, according to one of the sources.

KKR acquired Epicor from Apax Partners in 2016 for $3.3 billion, including debt. Apax acquired Epicor in 2011, taking it private, and merged it with another newly acquired technology peer, Activant Solutions Inc, in a $2 billion deal.

Under KKR, Epicor has been acquisitive, snapping up many small-business software vendors.

The software sector has been one of KKR’s most prominent investment areas. Its previous deals include BMC Software, Exact Software, MYOB, Epicor, Onestream, iValua and Visma.

Some technology-focused private equity firms, such as Thoma Bravo LLC and Vista Equity Partners Management LLC, devote much of their funds to investments in business software firms.

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Maybe Service Connect makes a huge come back, instead of JitterBit. :slight_smile: @Mark_Wonsil @ERPSysAdmin @Banderson

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AAAAAAHHH Service Connect… :heart_eyes:

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Every time you mention JitterBit I think of this song:


They need to use this in their advertising! :laughing:
Most of you youngins have probably never heard this before. :roll_eyes: Just trying to make you more cultured. Welcome to the Culture Club! :wink:
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I wouldnt mind throwing SC in a bag, beating it with a bat, tying a weight to the bag, tossing it off a 100 ft cliff into an obscure part of the ocean.

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This makes me sad after all those hours I spent training you on SC you just want to kill it dead! It is such an amazing easy to use and intuitive product. @hkeric.wci loves it

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I would gladly welcome an alternative to SC that can do the same and more with drag and drop ease.
Perhaps better ability to troubleshoot when something does not work as expected image002.png

@ERPSysAdmin – how did you get a picture of my server room ?

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We have the same server room?

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wham

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So who would potentially buy Epicor? Salesforce, M$, SAP, Oracle?

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Interesting thought experiment:

  • SalesForce: Their ERP is weak but they are PaaS and to rewrite everything in their platform would not pay off IMHO. Even with the Tableau acquisition, they are more of a cloud company at heart.

  • SAP has wanted to get into the SME market but the requirements (especially on-prem) are prohibitive. IMHO, the Cloud is going to be the best bet for SMEs in the coming years as IT budgets are pared back and compliance costs grow. Again, SAP has its own development environment, so unless they kept it as a separate product - I can’t imagine them making a go at it.

  • Oracle: :face_vomiting: While many current Epicor employees hail from Oracle, an Oracle buyout would probably stop all development and try to merge the user base with NetSuite. Oracle is primarily a licensing company these days. (See Java)

  • Microsoft: For distribution and service, they are doing well with Dynamics. AX is not as feature-filled as E10 but Microsoft has, as Microsoft does, slowly improved it year over year. With a web-API backend, they could introduce E10 functionality in the line. I’m not sure they would replace AX or add to it like an Dynamics ERP product.

  • Most Likely: No sale or a sale to another VC firm.

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Unfortunately I don’t have that sort of pocket change laying around, but it would be fun if I did. :rofl:

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Maybe next time then, in another 3 years :slight_smile:

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KKR & Co pulled the sale process for Epicor Software after bids came in below expectations, sources familiar with the process told Buyouts. KKR, advised by Barclays, was expected to fetch between $4 billion and $5 billion for Epicor, Buyouts reported in August. Source: PEHub.

No Deal. We stuck with Jitterbug @ERPSysAdmin

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@hkeric.wci I’m curious if the KKR global macro team is able to get anonymized data from their software investments. There are a lot of companies that are providing “alternative data” and I could easily see a future where retail/manufacturing telemetry is an alternative data source. The fact they were trying to sell the company makes me think they don’t do this (yet) or tried and didn’t find it valuable.

I don’t think this is good or bad I just see this as the natural progression to the information existing.

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According to PE Hub (registration required) KKR have put Epicor up for sale. This is the second time that the private equity firm KKR has put the company up for sale. The last time, in August 2019 KKR was targetting around $5 billion including debt. Epicor came off the market in October again. So what has changed in the interim?

If no sale is agreed, where does KKR go next? Will it consider splitting out elements of Epicor, such as DocStar to recoup further money?

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They’ve yet to impress me with what they’ve done to DocStar. I could see them dropping it. Could also see them dropping Service Connect. Epicor is reselling Jitterbit now. And selling PS for Jitterbit.

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Which is disheartening, because many topics here end up with, “That’s easy if you have DocStar…”

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It’s way over sold IMO. The product looks like it’s from the 90s. They’ve not made any updates to it.

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We are currently trying to implement the whole thing (Full DocStar with document recognition and AP Automation the whole kitten)… and so far… :expressionless: I’m pretty sure we are the first people trying

My opinion not that of my employer

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We use Hyland Software | Content Services | Enterprise Content Management

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