Apax Partners to Acquire Epicor, Activant for $2 Billion
April 04, 2011, 4:37 PM EDTBy Katie Hoffmann and Anne-Sylvaine Chassany
(Updates with advisers in last paragraph.)
April 4 (Bloomberg) -- Apax Partners LLP, the London-based private equity firm, agreed to buy U.S. business-software makers Epicor Software Corp. and Activant Solutions Inc. in deals valued at about $2 billion. It plans to combine the two.
Epicor investors will get $12.50 a share in cash, valuing the Irvine, California-based company at $976 million, according to a statement from Epicor today. That’s 11 percent more than Epicor’s closing price on the Nasdaq on April 1. The companies didn’t give an exact price for closely held Activant, which is based in Livermore, California.
Apax plans to merge the companies to create a software maker with $825 million in annual sales and a focus on manufacturing, distribution, services and retail industries. Epicor, which has had four straight quarters of sales growth, makes programs that help companies manage supply chains and customer relationships.
“In addition to the immediate product and service portfolio enhancements that will result from the combination, both companies’ customers will benefit from the strong financial backing of Apax Partners and our commitment to building the new Epicor into the global leader for enterprise business applications,” Jason Wright, a partner at Apax Partners, said in a statement.
New Fund Planned
Private equity firms such as Apax are resuming takeovers after the financial crisis almost halted buyouts for two years. Apax, which is investing an 11.2 billion-euro ($15.9 billion) fund raised in 2007, dropped a 6.4 billion-euro bid in January to buy ISS A/S, the world’s largest cleaning-service provider, after the owners asked for more money. The transaction would have been the largest leveraged buyout in Europe since the credit crisis. Apax is planning to start marketing a new fund later this year, a person with knowledge of the matter previously said.
Epicor rose $1.32, or 12 percent, to $12.56 at 4 p.m. New York time in Nasdaq Stock Market trading. The shares have climbed 24 percent this year.
Leveraged buyout firms such as Apax pool money from investors to take over companies, financing purchases mostly with debt, planning to sell them later for a profit. They have led $90 billion of transaction this year, more than twice the amount last year, according to data compiled by Bloomberg.
Epicor’s board unanimously approved the deal, Epicor said. Elliott Associates LP, which owns about 14 percent of the company’s shares, supports the transaction, Epicor said.
--Editors: Ville Heiskanen, Steve Bailey.
To contact the reporters on this story: Katie Hoffmann in New York at khoffmann4@bloomberg.net; Anne-Sylvaine Chassany in London at achassany@bloomberg.net
To contact the editor responsible for this story: Peter Elstrom at pelstrom@bloomberg.net
