Apax to shop stake in ECi Software Solutions

Apax Partners is looking to sell a piece of ECi Software Solutions after receiving inbound inquiries from financial sponsors, three sources familiar with the process told PE Hub.

The firm intends to sell a 50 percent stake in the software company, two sources said. No banker is assisting the firm in the sale, the people said.

It’s unclear whether Carlyle Group, which owns a minority position in ECi, is planning to exit its stake. Carlyle initially invested in ECi in March 2014 out of the Carlyle U.S. Equity Opportunity Fund.

ECi, based in Fort Worth, Texas, provides cloud-based business application software and enterprise resource planning (ERP) technology to small and medium-size businesses in the manufacturing, building and construction, field service and distribution markets.

The company generated $111 million in 2019 Ebitda, according to one of the people. Apax is looking to command a price for the stake sale that assigns ECi a total valuation of $2.5 billion, the source said, implying an Ebitda multiple just north of 22x.

A more realistic valuation would hover around $1.6 billion or $1.7 billion, or approximately 15x Ebitda, another source said. Apax ran a market check in the fourth quarter of 2019 but did not find a buyer at its expected value, this person added.

Apax invested in ECi in June 2017, acquiring a majority stake from Level Equity and Carlyle. The latter retained a minority position.

Apax simultaneously combined ECi with Macola, JobBOSS, and MAX – all part of Exact Software, an existing Apax portfolio company. The combination was intended to broaden ECi’s ERP software offerings in the manufacturing vertical.

The company has since grown through several bolt-on acquisitions. Most recently, ECi in August acquired Trivest Software, a vertical software provider to the small and medium-size businesses in the manufacturing sector.

In the summer, ECi acquired Pacsoft, a provider of inventory management and software for hardware retail and trade businesses, and Spruce Computer Systems, a UK-based reseller of ECi’s Spruce software for managing timber.

Apax Partners declined to comment. Carlyle Group and ECi Software did not immediately return a request for comment.

Action Item: View Apax Partners’ form ADV.