CD&R Acquires KKR’s Epicor

Clayton, Dubilier & Rice (CD&R) has agreed to acquire Epicor Software from KKR in a transaction valued at $4.7 billion. KKR purchased Epicor in July 2016 from Apax Partners at an enterprise value of $3.3 billion.

Epicor is a provider of industry-specific enterprise software to more than 20,000 medium-sized businesses active in the manufacturing, distribution, services, and retail sectors. The company’s annual revenue is comprised of more than 73% recurring revenue. Epicor, led by CEO Steve Murphy, was founded in 1972 and is headquartered in Austin, Texas.

“This is an exciting day for the entire Epicor family—employees, customers, and partners alike – and validates the company’s leadership position across markets we serve,” said Mr. Murphy. “We welcome this new partnership with CD&R, which shares our vision for growing the company, and I thank KKR for a highly successful partnership these past few years. We are excited to work with CD&R to increase investment in our market-leading product portfolio and to enhance our ability to support an ever-increasing range of customer needs.”

Upon the close of this transaction later this year, Jeff Hawn, an operating partner at CD&R, will serve as the chairman of Epicor. Mr. Hawn has more than 20 years of experience across a range of senior executive roles in software and technology-related businesses, including serving as chairman and chief executive officer of Quest Software, Vertafore, and Attachmate.

“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,” said Mr. Hawn. “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.”

New York and London-based CD&R invests in European and US-based businesses. Since founding in 1978, the firm has invested $30 billion in 93 companies across a range of industries including numerous consumer health and medical device businesses.

“Four years ago, we embarked on an ambitious product modernization journey together with Epicor and are incredibly proud of the successes that the company has achieved to date, particularly with its recent cloud releases,” said John Park, chairman of the Epicor board and head of technology private equity at KKR. “We are confident that CD&R will provide valuable support as the company continues these product- and customer- centric investments to accelerate growth in the cloud.”

KKR (NYSE: KKR) makes private equity, fixed income, and other investments in companies in North America, Europe, Asia, and the Middle East. KKR was founded in 1976 and in addition to its New York headquarters has offices in 19 cities around the world.

Barclays, BofA Securities and Jefferies are the financial advisors to KKR and Epicor, and UBS Investment Bank is the financial advisor to CD&R.

Private Equity Professional | September 2, 2020

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