Latest from Mergers & Acquisitions

Photo 226496518 /Mohd Izzuan Ros / Dreamstime
Photo 226496518 / Mohd Izuan Ros / Dreamstime
Photo_226496518 Mohd Izzuan / Ros /Dreamstime
226496518 /Mohd / Izzuan /Ros / Dreamstime
226496518 / mohd izzuan ros / Dreamstime
226496518 / mohd / izzuan / ros / Dreamstime
Last year's big Epicor users' conference in Las Vegas.

CD&R Buys Epicor in $4.7-Billion Deal from KKR, Will Maintain Focus on Cloud-Based Software

Sept. 11, 2020

Clayton, Dubilier & Rice (CD&R), one of the world’s largest private-equity firms, acquired Epicor, the electrical market’s largest provider of ERP software, in a $4.7-billion deal with KKR that Epicor says will help fuel its ongoing transition to cloud-based software systems for distributors.

The New York-based CD&R has been investing in distribution-based businesses for many years and today has investments in distributors including Beacon Building Products, Roofing Supply Group (RSG), SiteOne Landscape Supply and SunSource (fluid power and motion control).

It previously also had investments in PharMEDium/AmerisourceBergen (sterile pharmaceutical supplies), and earlier this year was outbid by WESCO Distribution for Anixter International. In the past, CD&R also invested directly in the electrical wholesaling industry, with stakes in Rexel, through a 2005 joint stake with Eurazeo and Merrill Lynch Global Private Equity, and WESCO, through a 1994 purchase from Westinghouse Electric Corp.

One of the major points of focus for the company, which counts no less than 56% of Electrical Wholesaling’s Top 200 electrical distributors as customers, has been transitioning customers to its suite of cloud-based software products. According to the Epicor press release announcing the acquisition, over the past four years under KKR’s ownership, Epicor’s executive team, led by Chief Executive Officer Steve Murphy, has driven growth through a combination of organic investments and strategic acquisitions. A series of new software releases has led to a sales mix that enjoys 73% recurring revenue. This includes a SaaS (software as a service) business growth rate of 60% year-to-date, the press release said.

“Epicor’s reputation for quality and performance, and its portfolio of next-generation cloud products, position the company well to accelerate growth in the coming years,” said Jeff Hawn, CD&R operating partner, in the press release.

Hawn will serve as chairman of the Epicor board of directors upon close of the transaction, expected later this year. He has more than 20 years’ experience across a range of senior executive roles in software and technology-related businesses, including serving as chairman and CEO of Quest Software, Vertafore and Attachmate.

According to information on Epicor’s website, the company has annual revenues of $800 million, 3,700 employees and 20,000 customers.