Apax to more than quadruple its money with Epicor sale: source

Apax Partners is selling Epicor Software Corp after a five-year hold and is expected to make 4.4x its money with the sale, a source familiar with the transaction said.

KKR said July 5 that it agreed to buy Epicor. Financial terms weren’t announced but the deal is valued at $3.3 billion, including debt, the source said.

Apax tried to sell Epicor in 2014. The U.K. private equity firm drew bidders including CVC Capital Partners, according to the Wall Street Journal. Bids, however, weren’t high enough, the story said.

Epicor is the Austin, Texas, provider of enterprise application software for midsized companies. Apax acquired the company in 2011 and merged it with Activant that May. The deals were valued at roughly $2 billion. Apax invested $647 million of equity in the transactions, Buyouts reported in 2015.

The buyout shop has already recouped its $647 million investment, Buyouts said. Epicor has paid out at least three dividends, including a $380 million distribution in 2013 and $300 million in 2015, Buyouts said.

In June 2015, Epicor spun out its retail solution business and launched it as an independent company, Aptos. Apax still owns Aptos. The firm’s 4.4x return includes the unrealized valuation of Aptos, the source said.

Apax used three funds to invest in Epicor: Apax Europe VII, Apax Europe VI and Apax US VII.

Apax Europe VI raised 4.3 billion euros ($4.77 billion) in 2005 while Apax Europe VII collected 11.2 billion euros in 2007. Apax US VII closed on $856.3 million in 2006, the firm’s website said.

Since inception through Sept. 30, Apax Europe Fund VI generated an IRR of 12.36 percent while the seventh pool produced a 5.4 percent IRR, performance data from California State Teachers’ Retirement System said.

Performance data for Apax US VII could not be found.

A spokesman for Apax declined comment.

Action Item: Contact Epicor: +1 800-999-1809

Photo courtesy ©iStock/D3Damon