KKR’s Epicor returns to the block, eyeing potential $5bn transaction

KKR-backed Epicor Software is back on the market, seven sources familiar with the situation told PE Hub.

The process was launched in summer 2019 and pulled by the firm in October after the bids for the software company came in below expectations, PE Hub reported at that time.

In August, KKR, advised by Barclays, was expected to receive between $4 billion and $5 billion for Epicor, PE Hub reported.

As the world reopens following lockdown, Epicor is set to test the waters for sale again. This time, the expected value is closer to $5 billion, the sources said.

This summer, KKR completed a dividend recap for Epicor with a portability debt feature, the sources said. The portable debt would allow Epicor’s new buyer to use the company’s existing debt to finance the new deal instead of raising new debt.

The recap allows KKR to sell a majority of the company, the sources said.

Epicor, which provides application software to companies in manufacturing, distribution, retail and the services industries, has seen its EBITDA grow to $360 million in 2020, from $280 million in 2016, the sources said.

KKR acquired Austin-based Epicor from Apax Partners in July 2016 for $3.3 billion, according to sources. Apax’s investment dates back to 2011 when the UK buyout shop took Epicor private. Apax merged Epicor with peer Activant Solutions. The combined deal was valued at $2 billion, a press release at the time said.

KKR and Barclays declined to comment. Epicor did not return PE Hub‘s request for comment.

Action Item: Check out KKR’s latest form ADV.