Thursday, October 09, 2014


So "funds advised by" Apax Partners, the PE giant who has danced in and out of the ERP graveyard for years (most recently failing to find a buyer for Epicor), will be acquiring Exact Holdings, the Dutch rollup which acquired several Tier 2 and Tier 3 ERPs back in the day.

Here's a detailed announcement from the company.

Haven't seen any discussion anywhere yet about potential combinations with Epicor, which would presumably hinge on the nature of the relationship between Apax and these acquisition funds.  The price tag for Exact is $925 million, a little less than Apax paid for Epicor in 2011 (they were looking for at least $3 billion to flip it this year).

Of course, the most likely scenario is just that the "funds advised by" Apax made Exact an offer that was too good to pass up.  The company announcement notes:
The Offer Price represents a premium of 27% to the closing price of 10 July 2014 and a premium of 40% to the average closing share price of the last 12 months prior to that date.
What it doesn't say is that the stock has been consistently down another 10% or so since July, so the premium is even higher than that.  Perhaps the "funds advised by" Apax are looking for a way to pay themselves some nice dividends, like Apax did for itself when it straddled Epicor with additional debt.

For what it's worth, the Bloomberg report on the deal dispenses with the "funds advised by" fig leaf, and just says Apax.  It also includes this beaut of a quote from a Dutch financial analyst:  "Software providers in general are very attractive for private equity, especially when the stocks are trailing due to macroeconomic developments."

In other words, if you've got to put your money somewhere in a crappy market, buy companies with captive customers.  (Here's where I make my regular pitch for open source ERP, which has the effect of giving those customers real choice and control over their software investment...)

Stay tuned.