Activant Solutions and Epicor purchased by same private-equity firm

May 1, 2011
Epicor Software Corp., Irvine, Calif., and Activant Solutions Inc., Livermore, Calif., were purchased on April 4 for a combined sum of approximately $2

Epicor Software Corp., Irvine, Calif., and Activant Solutions Inc., Livermore, Calif., were purchased on April 4 for a combined sum of approximately $2 billion by Apax Partners, New York, a global private-equity firm that invests in technology companies. If the mergers close as expected by the second quarter of 2011, the new entity will be known as Epicor Software Corp. The new company will have the financial backing of Apax Partners, which manages more than $40 billion in funds and is a big player in the technology, telecommunications, retail, consumer, media, healthcare and financial and business service markets.

Epicor is actually larger than Activant when measured by annual revenues. According to its most recent 10-K, Epicor had 2010 sales of approximately $440.3 million. To date, Epicor has focused on providing enterprise resource planning (ERP) software for distributors and manufacturers in the restaurant, hotel, automotive manufacturing and consumer packaged goods arenas. Currently owned by investment funds affiliated with Hellman & Friedman LLC, Thoma Bravo LLC and JMI Equity, and by management, Activant is the owner of several well-known distribution software packages including Eclipse, Trade Service Systems Array, Prophet 21 and Prelude Systems. Activant had 2009 revenues of $370.75 million and 1,700 employees, according to information on its 10-K and its website.

The company is best-known in the electrical wholesaling market as the industry's biggest software provider, for the data it provided to power IDEA's Industry Data Warehouse (IDW), and for the SKU-level data its Vista Information Services unit provides.

But at $217.37 million in 2010 revenues its retail products, services and data division for distributors, hardware stores, lumber stores, auto supply stores and other companies in the retail markets actually accounts for a bigger slice of its total business (approximately 57 percent). Activant's Wholesale Group, which includes the distribution software packages for electrical distributors, accounted for $153.38 million (approximately 43 percent) of the company's total 2010 sales. Sales of systems to distributors totaled $51.56 million, while services accounted for $101.72 million.