Clayton Dubilier & Rice (CD&R) has agreed to acquire ERP vendor, Epicor Software, from KKR for $4.7 billion. The deal is expected to close this year.
Throughout its four years of owning Epicor, KKR completed a number of acquisitions for Epicor, including electronic-data interchange software maker 1 EDI Source Inc. and warehouse-management software provider Majure Data Inc.
CD&R’s acquisition of Epicor seems to make sense as most of Epicor’s customer base is in the industrial sector, and CD&R has significant experience investing in this sector. In fact, many of its portfolio companies have been Epicor customers.
In addition, CD&R views Epicor as a resilient company in this economic downturn due to its long-term customer base and recurring revenue through business software sales. Companies like Epicor have been popular targets for the private equity industry.
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So, what does the future hold for Epicor? CD&R plans to expand Epicor by building cloud-based products with a software-as-a-service (SaaS) model, as well as acquiring other companies in the sector.
Epicor currently provides a variety of hosting and deployment models, but its functionality in the cloud has room to grow. We expect that CDD&R’s acquisition of Epicor would mean increasingly advanced functionality in the cloud, including embedded EDI and advanced warehouse management. This will allow Epicor to develop a focused set of products in an SaaS model. Epicor will most likely continue to consolidate products and put more focus on developing and expanding into their successful verticals.
Is Epicor Right for Your Organization?
We are looking forward to these future developments as Epicor is already a strong vendor that we’ve included in many of our top 10 lists, including our 2019 Top 10 Manufacturing ERP Systems Report, 2019 Top 10 Distribution ERP Systems Report, and 2020 Top 10 ERP Vendors Report.
As with any software selection decision, it pays to take your time and first understand your current state and your organizational goals. Our ERP consultants can help you navigate the ERP selection process and understand what all the merger and acquisition activity in the industry means for you.
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