Private equity firm Apax Partners plans to acquire mid-market ERP software vendors Epicor Software (NASDAQ: EPIC) and Activant Solutions, the second big ERP acquisition in the last few weeks.
The Apax deal would combine Activant's ERP solutions for retailers and distributors with Epicor's software for retail, manufacturing, distribution, hospitality and services. The merger deal is valued at $2 billion, and the combined company — to be called Epicor Software Corp.Epicor Software Corp. — will have more than 30,000 customers and $825 million in annual revenues.
Activant is a privately held company controlled by investment funds affiliated with Hellman & Friedman, Thoma Bravo and JMI Equity.
Apax will commence a tender offer for the outstanding common stock of Epicor for $12.50 a share in cash, followed by a merger to acquire all remaining shares at the same price. The offer price represents a premium of 11.2 percent over Friday's closing stock price and an 18.9 percent premium over the average closing price for the previous 30 calendar days, the companies said. Shareholders representing 19 percent of Epicor's outstanding shares have expressed their support for the deal, and Elliott Associates, which owns about 13.5 percent of Epicor's outstanding shares, also supports the transaction.
Epicor CEO George Klaus stated that the merger "is extremely positive for Epicor's customers, employees and shareholders alike. It offers great value to our current stockholders and represents an endorsement of the business strategy, products and technology leadership we have established in the market."
Jason Wright, a partner at Apax Partners, said the deal will give Epicor access to additional markets like wholesale distribution and automotive, hardlines (such as tools and appliances), lumber and specialty retailing, while Activant will gain greater international operations, softlines (such as clothing and shoes) retail functionality, and additional supply chain and manufacturing capabilities.
Epicor's board of directors has approved the transaction, which is expected to close later this quarter. Under the terms of the agreement, Epicor may solicit superior proposals from third parties through May 4, but Epicor said it likely won't announce any such developments "unless the company's board of directors makes a decision with respect to a potential superior proposal. There are no guarantees that this process will result in a superior proposal."
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