Not Resting, CD&R Will Acquire Epicor for $4.7 Billion

Just three weeks after announcing the landmark acquisition of HD Supply’s Construction & Industrial – White Cap business unit, private investment firm Clayton, Dubilier & Rice made more waves in the B2B distribution space Monday by announcing it will acquire business software provider Epicor.

New York City-based CD&R said it will buy Austin, TX-based Epicor Software Corporation from fellow investment firm KKR in a deal valued at $4.7 billion, gaining one of the most well-known providers of ERP software, retail management, content management, e-commerce and other back-end business management software.

Epicor is the platinum sponsor of Industrial Distribution’s soon-to-be-revealed 2020 Big 50 List. The company’s Prophet 21 software is arguably the most popular ERP software used throughout the industrial distribution market.

Serving clients across the manufacturing, distribution, lumber & materials, automotive & commercial vehicle industries, Epicor has more than 20,000 customers worldwide.

"This is an exciting day for the entire Epicor family — employees, customers, and partners alike — and validates the company's leadership position across markets we serve," Epicor CEO Steve Murphy said. "We welcome this new partnership with CD&R, which shares our vision for growing the company, and I thank KKR for a highly successful partnership these past few years. We are excited to work with CD&R to increase investment in our market-leading product portfolio and to enhance our ability to support an ever-increasing range of customer needs."

KKR bought Epicor for approximately $3.3 billion, including debt, from Apax Partners in 2016. Since then, Epicor’s revenue mix has been comprised 73 percent of recurring revenue, according to a CD&R press release Monday. That figure includes a year-to-date SaaS business growth rate of 60 percent.

"Epicor's reputation for quality and performance, and its impressive portfolio of next-generation cloud products, position the company well to accelerate growth in the coming years," said Jeff Hawn, CD&R operating partner. "We look forward to partnering with the Epicor management team to further expand Epicor's product portfolio as well as make strategic acquisitions to meet customers' evolving digital transformation needs."

On Aug. 11, CD&R announced that it will acquire HD Supply’s White Cap business for $2.9 billion, and upon closing — expected in October — CD&R will merge White Cap with the investment firm’s Construction Supply Group to create a newly-formed construction supplies distributor with more than $4 billion in annual revenue.

In December 2019, CD&R was poised to acquire electrical and security products distributor Anixter International for $3.8 billion before fellow distributor WESCO International eventually outbid the private firm several months later.

And in August 2017, CD&R completed its acquisition of HD Supply’s Waterworks segment for $2.5 billion, and soon after rebranded that business as Core & Main.