CD&R Buying Epicor Software From KKR For $4.7 Billion

By Dan Anderson ● September 1, 2020
  • Clayton, Dubilier & Rice, KKR & Co Inc (NYSE: KKR), and Epicor Software Corporation recently announced a definitive agreement where CD&R funds will buy Epicor from KKR for $4.7 billion

Clayton, Dubilier & Rice, KKR & Co Inc (NYSE: KKR), and Epicor Software Corporation recently announced a definitive agreement where CD&R funds will buy Epicor — a global provider of industry-specific enterprise software to industrial-focused sectors — from leading global investment firm KKR.

This transaction represents an important milestone for Epicor, which is a leading enterprise software vendor delivering cloud-enabled services to over 20,000 customers globally. And Epicor’s flagship products are curated to support complex, vertical-specific workflows, and provide mission-critical support to customers seeking to drive growth and profitability in their own businesses. Plus Epicor is an acknowledged leader in the industrial end markets it serves, including manufacturing, distribution, retail, and services categories.

In the past four years under KKR’s ownership, Epicor’s executive team — led by CEO Steve Murphy — has driven growth through a combination of organic investments and strategic acquisitions. A series of new product releases has led to a revenue mix comprising 73% recurring revenue, which includes an industry-leading SaaS business growth rate of 60% year-to-date. And Epicor is well-positioned for its exciting next chapter under CD&R ownership.

CD&R Operating Partner Jeff Hawn will serve as Chairman of the Epicor Board upon close of the transaction, expected later this year. And Hawn has over 20 years’ 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.

UBS Investment Bank is acting as financial advisor and Debevoise & Plimpton LLP as legal advisor to CD&R. And Barclays is acting as lead financial advisor, BofA Securities, and Jefferies LLC as financial advisors, and Simpson Thacher & Bartlett LLP as legal advisor to KKR and Epicor.

KEY QUOTES:

“This is an exciting day for the entire Epicor familyemployees, customers, and partners alike and validates the company’s leadership position across markets we serve. 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.

— Epicor CEO Steve Murphy

“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. 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.

— Jeff Hawn, CD&R Operating Partner

“We are excited to partner with Epicor and its talented management team to drive the business into a new phase of growth and profitability. Our long-standing industrial end-market experience and growing enterprise software expertise aligns well with Epicor’s value creation plan.

— Rick Schnall, CD&R Co-President

“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. 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.

— John Park, Chairman of the Epicor Board and Head of Americas Technology Private Equity at KKR