Apax is buying Activant Solutions, a Livermore, Calif.-based provider of enterprise resource planning software for mid-market retailers and distributors. Activant had 2009 revenue of $378.9 million and over 1700 employees, according to the company’s web site. Hellman & Friedman, Thoma Bravo and JMI Equity, which acquired Activant in 2006, are the sellers.
Apax is also buying Epicor Software Corp., which offers ERP software for manufacturers. Apax is paying $12.50 a share cash for Epicor, an 11.2% premium to the company’s closing share price of $11.24 on Friday. The deal is valued at $976 million.
Elliot Associates, which owns 13.5% of Epicor, has agreed to the sale. In February, Epicor reported that fourth quarter revenue grew about 5% to $117.2 million. Epicor, of Irvine Calif., employs 2,572 people. As of Dec. 31, 2010, debt consisted of $230 million in outstanding bonds and $47.5 million in a credit facility.
Shares of Epicor gained $1.25, or 11.21%, to $12.50 a share in mid-day trading Monday.
The combined company, which will be private, will be called Epicor Software Corp. It will have 30,000 customers and $825 million in annual revenue. It was not clear whether there will be any job cuts or management changes at either company.
The sale of Epicor does include a go shop which allows the company to seek out superior proposals from third parties through May 4. Epicor’s board has approved the sale, which is expected to close in the second quarter.
“At this time Epicor and Activant remain two separate companies and we have no comment on any potential go-forward management or product strategy,” wrote Damon Wright, VP of Epicor’s investor relations, in an email.
Officials for Activant declined comment.
Apex proposed buy of both Activant and Epicor “is a major consolidation play in mid-market ERP,” one banker says. Epicor will be a “nice combination” with Apax portfolio company Plex Systems, which provides software for manufacturers, the source says.
The ERP space has seen significant amount of consolidation. Lawson Software, last month, received a $1.8 billion bid from Infor. Other ERP vendors, like Oracle, are expected to bid for Lawson, according to press reports.
Apax typically invests in larger deals, in companies with a value between €1 billion and €5 billion. The buyout shop targets five sectors including tech & telecom, retail & consumer, media, healthcare and financial & business services. Apax is currently investing from two funds: Apax Europe VII which raised €11.2 billion (US$15.9 billion) in 2007 and Apax US VII which raised $856.34 million the year before.
Bank of America Merrill Lynch and RBC Capital Markets are providing debt financing for the Epicor acquisition. For Activant, Bank of America, N.A. and Royal Bank of Canada are offering debt.
Jefferies advised Activant in the sale. Ron Eliasek, Dave Ramazetti, Joe Jabes, Peter Gant and Jeff Gelles served as financial advisors to Apax in buying Activant and Epicor.
John Joliet, Stuart Goldstein, Kyle Madan, Ed Chung and Steven White of Moelis & Co. advised Epicor.