SOFTWARE

Austin's Epicor Software Corp. to be sold to private equity firm KKR

Posted July 5th, 2016

Austin's Epicor Software Corp. said it had agreed to be acquired by private equity firm KKR. 

Epicor provides industry-specific enterprise software to promote business growth. Their clients are in the manufacturing, distribution and retail industries.

Apax Partners, another private equity firm, bought Epicor back in 2011.

No sales price was disclosed,but the Wall Street Journal reported that a previous attempt to sell Epicor resulted in offers around $3 billion. Those offers were rejected back in 2014.

That same year, the company moved its headquarters to Austin. The company employs 4,000 people worldwide and 250 in Austin. Previously it was reported that Epicor employed 300 in Austin

Private equity firms typically buy companies using funds from investors. They then attempt to enhance their value, usually by cutting costs or finding ways to increase the company's growth and revenue.

These firms then look for an exit strategy to generate returns for their investors, such as selling the company to another business, or conducting an initial public offering.

In the case of Epicor, which was bought by one private equity firm and is now being sold to another, this is called a "secondary buyout," and this type of exit strategy has become more popular in recent years.

Epicor said it was premature to discuss its plans for after the purchase, since it has yet to be finalized. But company spokeswoman Erin Lutz said she can confirm Austin will remain the company's headquarters and "it is anticipated that more senior management will be based in Austin going forward."

Epicor released a written statement on Tuesday from Joe Cowan, the president and CEO of Epicor. 

“KKR shares our vision of providing innovative technology with a clear focus on helping customers grow business, not software. This is an exciting time for Epicor, and I am extremely appreciative of Apax’s support during the last five years," Cowan said. “We are eager to work with KKR and believe their capabilities in the technology sector, both domestically and internationally, will enable us to find new ways to create value.”

KKR is making the investment from its Americas Private Equity investment fund. KKR said in a statement that they are "pleased to be partnering with Epicor to accelerate its next phase of global growth."

The transaction is expected to close by the end of August, subject to regulatory approvals. 

This story was updated to include information on Epicor's plans in Austin and additional background information on how private equity firms work and what a secondary buyout is.

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