KKR to acquire Epicor from Apax

In its second exit this week, Apax is offloading the software maker in a deal generating a 4.4x return.

Global buyout house KKR has agreed to acquire software company Epicor Software Corporation from fellow private equity firm Apax Partners, according to a statement.

A source close to the matter told Private Equity International Apax is selling Epicor to KKR for $3.3 billion.

Epicor provides industry-specific enterprise software to the manufacturing, distribution and retail sectors to promote business growth. The company has customers in more than 150 countries and provides software which is localised for specific markets, so that as a company expands geographically, Epicor can facilitate that growth, it said.

Apax invested in Epicor in 2011. The sale to KKR will generate a gross money on invested capital of 4.4x in euro terms for the €11.2 billion Apax Europe VII, the $856 million Apax US VII and the €4.31 billion Apax Europe VI, according to the source, who added that Apax already received the proceeds from the company’s recapitalisations in 2013 and 2015.

The source also said the gross return includes the value of Aptos, a technology solutions business which spun out of Epicor in June 2015 and is still held by Apax funds.

KKR is investing in Epicor primarily using capital from KKR North America Fund XI, a 2012-vintage fund which closed on $9 billion.

As at 31 December 2015 the fund was delivering a total value multiple of 1.43x and an internal rate of return of 20.6 percent for the Oregon Public Employees Retirement Fund, which committed $750 million to the vehicle, according to PEI Research & Analytics.

Last week Apax agreed to offload Canadian auto marketplace Trader Corp to Thoma Bravo for C$1.575 billion ($1.2 billion; €1.1 billion), as reported by PEI. That investment also came from Apax Europe VII, Apax US VII and Apax Europe VI, and represents a gross money on invested capital of about 3.3x, according to a source familiar with the matter.

The sales come as Apax enters the final stretch of its latest fundraise. Apax IX has already amassed $7.9 billion, more than its $7.5 billion initial target, and has set a hard-cap of $9 billion.

The firm held an initial close on Apax IX on 20 May, with commitments reaching $7 billion, as reported by PEI. The fund has since reportedly held an official first close.

Apax funds have realised a total of $20.9 billion, including the Epicor transaction, since January 2014, the source said.