KKR Sells Epicor Software to CD&R for $4.7B

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Epicor Software is moving to a new private-equity home, with KKR agreeing to sell the business software firm to Clayton Dubilier & Rice for $4.7 billion.

The deal comes four years after KKR acquired Epicor from British private-equity firm Apax Partners for $3.3 billion.

Austin, Texas-based Epicor provides back-office and sales software to more than 20,000 customers in the retail, distribution and manufacturing sectors. Under KKR’s ownership, it has made a number of acquisitions, including deals for electronic-data interchange software maker 1 EDI Source and warehouse-management software provider Majure Data.

According to The Wall Street Journal, CD&R has “significant experience investing in the industrial sector, from which most of Epicor’s customer base hails. In addition to software and tech services, the firm does deals in the consumer and retail and health-care sectors.”

“Epicor’s reputation for quality and performance, and its impressive portfolio of next-generation cloud products, position the company well to accelerate growth in the coming years,” Jeff Hawn, an operating partner at CD&R, said in a news release.

“We look forward to partnering with the Epicor management team to further expand Epicor’s product portfolio as well as make strategic acquisitions to meet customers’ evolving digital transformation needs,” he added.

CD&R uses operating partners — executives who have held senior leadership positions at major global corporations — to help it source and evaluate deals and provide strategic advice. Hawn, who will serve as chairman of the Epicor board, was formerly CEO of Quest Software.

Epicor’s solutions include enterprise resource planning, customer relationship management, supply chain management, and human capital management software. The products are available as software-as-a-service (SaaS) and on-premises.

Apax bought Epicor and a peer, Activant Solutions Inc., in 2011 and combined the two companies. According to CD&R, Epicor has a revenue mix that consists of 73{f08ff3a0ad7db12f5b424ba38f473ff67b97b420df338baa81683bbacd458fca} recurring revenue, which includes an SaaS business growth rate of 60{f08ff3a0ad7db12f5b424ba38f473ff67b97b420df338baa81683bbacd458fca} year-to-date.

“Companies such as Epicor that generate recurring revenue through business software sales have been popular targets for the private equity industry,” Reuters said.