Epicor on the blocks

Update 10/14: Epicor has rejected the offer of $9.50 per share. The stock opened at $6.61 today. Paging Carl Icahn...

-----

Well, many months later, but a similar story to the Golden Gate-Exact rumor below is unfolding. First noted by the research firm 451 Group (subscription only) a week ago, the hedge fund Elliott Associates bought a 10% stake in Epicor, and was making noises about forcing a sale. 451 took a dim few of the chances of such a sale to the likely strategic suspects (Microsoft, Oracle, SAP), and noted that "private equity-backed ERP rollups – which would have trouble digesting an acquisition the size of Epicor, in any case – have been sidelined recently."

Seems that Elliott has come to a similar conclusion, as they're now making an offer for the whole enchilada. Hope they're serious about being a "long-term player" because as 451 observed, it's hard to see a logical flip buyer anytime in the medium-term future.

But hey, maintenance revenues are up (as a percentage of revenue and earnings - WARNING, WARNING!) - so maybe they can just give the cow a good milking for a number of years, everybody can make some nice fees on the deal, and heck with the customers. Sorry, did that sound cynical?

Let's go Dutch: Golden Gate to buy Exact for Infor?

Dutch treat (NOUN) ... An outing, as for dinner or a movie, in which all persons pay their own expenses. (American Heritage Dictionary)

Somehow this one seems to have escaped the notice of most of the US tech press: Exact Holdings (based in Amsterdam) is talking to private equity firms about a sale, including Infor backer Golden Gate Capital. This article in the Financial Times has the skinny.

For those of you keeping score, that would mean a second tombstone for the venerable Macola ERP apps, and a third for the trio of small-company products acquired most recently from Kewill: MAX, Alliance/MFG, and JobBOSS.

SAP buys Business Objects

This one's all over the financial press, so I won't bother with any links right now. But it's worth asking what's really driving this. As lots of people have observed, it's a pretty dramatic strategic turnaround for SAP - especially on the heels of the Business ByDesign product announcement (which seemed to underscore their internal-growth plan).

So are they just playing catch-up to Larry Ellison? Or is it a deeper problem? The market expects some pretty big revenue numbers from SAP, and there aren't but so many $100MM software sales out there to be had. OK, so they'll launch the ByDesign midmarket play, but sheesh, that's a lot of volume they'll need to generate.

Maybe cheaper just to buy the revenue.

So, will they end up buying Infor eventually, as AMR's Bruce Richardson and others hasve suggested? I was skeptical, but less so now. Haven't seen that S-1 filing yet. Just think of all the trees we could save by just fast-forwarding straight to that deal.

Burp! That little piece of Syteline tastes like a bad mortgage!

In an interview with Managing Automation, Infor CEO Jim Schaper says they're going to take a little breather from gobbling up software companies. Sadly, it seems the formerly voracious PEGs who funded the takeover spree until now are now worried about the overall state of the debt markets.

It's not fair! Just because Capital One sent all those credit card applications to unemployed people, that doesn't mean we should stop rounding up ERP corpses! What's an ERP graveyard without fresh carrion? :(

Oh well. Schaper does say Infor will concentrate on "preparing the company for an initial public stock offering, which could take place within the next 12 months." That's when the PEGs will cash out, of course. And that gives me an idea.

We've heard similar rumblings from the other end of the spectrum, open source CRM startup SugarCRM. Sugar will do maybe $15 million in revenues this year, but is in a hot space and growing like kudzu organically. Infor will do $2.3 billion (with a B) - that's 153 times more.

Anyone want to bet which company goes out first?

And if you really want to place a bet, talk to me about comparative valuation ranges for the offerings. Comment away!

Soft demand for Soft Brands (or, "please buy us, SAP")

Curiouser and curiouser. After spending the past couple of years batting eyelids at SAP with the "Fourth Shift SAP Business One Edition for Small Manufacturers Who Want to Staple Together Two Completely Dissimilar Legacy Windows Products," now Soft Brands has quietly turned off the lights on the solo Fourth Shift product altogether. Managing Automation has the story. This might be the first Graveyard case where there's nothing left to buy in the end: a nearly-cost-free de facto acquisition.