Sponsor: Apax Partners
Target: Epicor Software Corp.
Price: $976 million
Target: Activant Solutions
Sellers: Hellman & Friedman, Thoma Bravo, JMI Equity
Apax is buying
Apax is also buying
Elliot Associates, which owns 13.5 percent of Epicor, has agreed to the sale. In February, Epicor reported that fourth quarter revenue grew about 5 percent to $117.2 million. Epicor, of Irvine Calif., employs 2,572 people. As of Dec. 31, 2010, debt consisted of $230 million in outstanding bonds and $47.5 million in a credit facility.
The combined company, which will be private, will retain the Epicor Software name. It will have 30,000 customers and $825 million in annual revenue. It was not clear whether there will be any job cuts or management changes at either company.
The sale of Epicor does include a go-shop provision, which allows the company to seek out superior proposals from third parties through May 4. Epicor’s board has approved the sale, which is expected to close in the second quarter.
“At this time Epicor and Activant remain two separate companies and we have no comment on any potential go-forward management or product strategy,” wrote Damon Wright, VP of Epicor’s investor relations, in an e-mail message.
Officials of Activant declined comment.
The Apex proposal to buy both Activant and Epicor “is a major consolidation play in mid-market ERP,” one banker said. Epicor will be a “nice combination” with Apax portfolio company
The ERP space has seen significant amount of consolidation.
Apax typically invests in larger deals, in companies with a value between €1 billion and €5 billion. The buyout shop targets five sectors including tech and telecom; retail and consumer; media; health care; and financial and business services. Apax is currently investing from two funds:
Bank of America Merrill Lynch and RBC Capital Markets are providing debt financing for the Epicor acquisition. For Activant, Bank of America NA and Royal Bank of Canada are offering debt.
Jefferies advised Activant in the sale. Ron Eliasek, Dave Ramazetti, Joe Jabes, Peter Gant and Jeff Gelles served as financial advisers to Apax in buying Activant and Epicor.
John Joliet, Stuart Goldstein, Kyle Madan, Ed Chung and Steven White of Moelis & Co. advised Epicor.
Luisa Beltran is a senior writer for peHub, a sister Web site to Buyouts.