Menlo Park-based Accel-KKR unloaded portfolio company CRS Retail Systems, selling the enterprise software maker for $121 million (€103 million) to Nasdaq-traded Epicor Software Corp.
The firm acquired the CRS in a roughly $45 million deal in 2002, and through the sale will realise a return multiple approaching 3x its equity investment.
The exit marks the realisation of Accel-KKR’s vision when it acquired the company three years ago. At the time, IT spending by retailers was overshadowed by companies adding new stores. As the cost of real estate escalated, retailers began exploring ways to find growth within their existing locations, and that opened the door for the software companies.
“We were real early in targeting this market,” Accel-KKR managing director Tom Barnds told PEO. “Retail software has historically been an afterthought. At the time, the sector was spending around 1 percent of its budget on IT. In 2002, we saw that changing…and over the [past] few years, there was a big uptick in IT spending [among retailers]”.
In addition to positive industry trends, CRS was able to grow through acquisition. The company bought Apropos Retail last year, which brought the revenues of the combined business up to around $70 million.
The firm also recruited Wal-Mart.com CEO Jeanne Jackson to serve on the company’s board. Jackson is the former head of the Gap’s Banana Republic division, and also sits on the boards of McDonalds, Nike and Williams Sonoma.
The exit comes at an opportune time for Accel-KKR, as it is in the midst of raising its second fund. According to the most recent SEC filings, dated in February of this year, the firm is targeting $200 million for the fund, Accel-KKR Capital Partners II.
In October, the firm realised another exit, selling its stake in 3D graphics technology outfit Alias in a $182 million deal to Autodesk. Accel-KKR had invested in Alias alongside Teachers’ Private Capital, the private investment arm of the Ontario Teachers’ Pension Plan.
SG Cowens advised Accel-KKR on the CRS sale, while Kirkland & Ellis provided legal counsel. Epicor was advised by Piper Jaffray, with legal oversight coming from Wilson Sonsini Goodrich & Rosati.