Epicor Software Corporation

The company delivers more than 40 years solutions for small, medium and large business, servicing over 20,000 clients more than in 150 countries. The solutions Epicor for resource management of the enterprise (ERP), sales management, supply chain management (SCM) and personnel management (HCM) allow the companies to increase the efficiency and profitability. Having wide experience of development of the innovative solutions, industry expertize and also commitment to excellence, Epicor is the uniform center of responsibility with a full range of products and services which are necessary for local, regional or global business.

History

2020: Clayton, Dubilier and Rice (CD&R) purchased Epicor for $4.7 billion

At the beginning of September, 2020 it was officially announced sale of Epicor of investment company Clayton, Dubilier and Rice (CD&R). The former owner of the producer of ERP systems — KKR — sold it for $4.7 billion that is 40% more than the amount which was paid by KKR for Epicor acquisition four years before.

It is going to close the transaction until the end of 2020 after obtaining necessary permissions from regulators. The UBS bank acted as the financial advisor CD&R at signing of the contract on purchase of Epicor, and on legal issues advised Debevoise & Plimpton. In turn, Barclays, BofA Securities, Jefferies LLC and Simpson Thacher & Bartlett LLP represented the interests of KKR and Epicor.

As noted in the press release, in four years of stay under a wing of KKR the Epicor company showed growth due to own investments and strategic acquisitions. Thanks to these initiatives about 73% of revenue where SaaS - the business companies enters began to come to the repeating income.

The producer of ERP systems Epicor is sold for $4.7 billion

The operational partner CD&R Jeff Hawn who will become the chairman of the board of directors of Epicor after closing of the transaction, noted the earned Epicor "reputation of the company which works for quality and financial results" and also "an impressive portfolio of cloud products of new generation which will help the company grow even quicker in the next years".

We hope for partnership with a team of managers of Epicor for further expansion of the range of the products Epicor and also for strategic acquisitions for satisfaction of the growing customer needs in digital transformation — Hawn said.

By the beginning of September, 2020 Epicor has about 20 thousand clients worldwide.

Such investment companies as CD&R and KKR, usually buy the companies on money of investors, and then try to increase their market value, for example, due to expense reduction and search of new sources of growth of business and revenue. After that the company, as a rule, either is sold, or brought to the exchange.^[1]

2016: Apax Partners sells Epicor to KKR fund for $3.3 billion

At the beginning of July, 2016 it became known of sale of Epicor Software for several billion dollars. The producer of the corporate software remained in hands of private investors.

As reported by Bloomberg, private investment fund Kohlberg Kravis Roberts (KKR) buys Epicor from Apax Partners fund. Though the companies did not sound the cost of the transaction, the edition knows that it is about $3.3 billion.

The producer of the corporate software Epicor Software is sold for $3.3 billion

The same amount is called by sources of the The Wall Street Journal (WSJ) newspaper. According to them, investments of Apax into Epicor paid off more than in a quadruple size. Apax purchased Epicor for $976 million in 2011.

WSJ reminds that Apax wanted to sell Epicor in 2014, but then investors changed the mind and about $3 billion rejected offers for the amount.

Long time we looked for the large and created software assets — Herald Chen, the co-director of KKR according to transactions in IT market says. - We looked for a profitable asset with perspectives of growth and the attractive price.

It is going execute all formalities concerning sale of Epicor of KKR company in August, 2016. At first the relevant regulating authorities should approve the transaction.

Participants of the transaction did not begin to disclose its conditions. As financial advisors of KKR within this acquisition Morgan Stanley & Co. and RBC Capital Markets act. The Epicor company is advised by BofA of Merrill Lynch and UBS Investment Bank.

Having redeemed Epicor, the Apax company integrated this developer with other software maker of Activant Solutions, having paid about $2 billion for this merge. Afterwards Epicor replaced heads and separated from itself the division proposing solutions for specialized retail networks.

We are proud of cooperation with Epicor which allowed to create one of the world's largest suppliers of corporate applications concentrated on clients and deep market examination — the partner of Apax Jason Wright noted.

2015

Joseph Kovan becomes the president of the company

President of Epicor Software corporation - Joseph L. Joseph L.Cowan (instead of earlier appointed Pervez Qureshi).

Selection of Epicor Retail Solutions in the independent company

On June 17, 2015 Aptos earlier known as Epicor Retail Solutions, announced the beginning of work as the independent company formed by way of selection from Epicor Software Corporation. Read more here.

2014: Apax Partners tries to sell Epicor for $3.5 billion

According to Wall Street Journal, the Apax Partners investment fund offered in the spring of 2014 for sale Epicor company with calculation to receive 3.5 billion dollars for the developer of schedule systems of resources of the enterprise (Enterprise Resource Planning, ERP). According to analysts, it is difficult to predict whom such purchase^[2] can interest^[3].

In 2013 turnover of Epicor made nearly one billion dollars. By estimates of sources of WSJ, Epicor it can be sold for 2.5-3.5 billion dollars taking into account the outstanding amount which is available for the company.

High price of Epicor can frighten off from purchase of her competitors of an average link, believes Dr. Martens. But there is a probability that such transaction can interest Unit4 company financed by private investors.

"In January the CEO of Unit4 Jose Duarte spoke about the strategy of active mastering of the vertical markets — the analyst notes. — However, he claimed that in Unit4 do not consider production as one of key verticals whereas purchase of Epicor could strengthen offers of the company in this area and also solutions for retail".

Among other probable applicants — Sage company which is guided by technologies of Microsoft too, and Infor which, according to Dr. Martens, aims to shoot ahead in a segment of industry cloud services.

Less probable candidate — Microsoft, whose CEO Satya Nadella would like to advance its business applications in the vertical markets more actively, than it becomes with the ERP system of Microsoft Dynamics now, the analyst adds. According to her, SAP, in turn, already has a powerful set of products for mid-scale businesses, as well as at Oracle offering them J. D. Edwards and cloud applicaions of Fusion.

2013: The claim to Alternative Technology Solutions for black software implementation

In 2013 the company submitted a claim against Alternative Technology Solutions service provider, having accused the last of illegal use of the ERP system based on which the provider developed and sold additions and services. The last was never the authorized partner of Epicor, but it did not prevent it to implement ERP from Epicor, to provide trainings on user training to work in a system and to give technical support.

2012: Plan of sales growth for 2-3%

According to forecasts of Epicor, total income of the company for 2012 financial year will be $866-870 million that is 2-3% more than the total hypothetical income in $847 million for 2011 financial year. It is expected that the adjusted earnings before interest contribution, taxes and depreciation charges (EBITDA) will be $220-222 million for 2012 financial year, for 14% having exceeded hypothetical corrected profit before interest contribution, taxes and depreciation charges (Pro Forma Adjusted EBITDA) of $194 million for 2011 financial year that is result of increase in profit and also the joint activity which followed after merge of Activant and Epicor. According to the estimates of experts, the net debt of the company for September 30, 2012 will make about $1.2 billion that will give net capitalization ratio near 5.4x.

By Epicor estimates, in 2012 financial year income in America grew approximately by 4% in comparison with previous year. The international income decreased approximately by 2%, however the Pacific Rim for several years shows considerable growth rates, compensating the decline in EMEA region caused by the continuing economic crisis explained in the company. Revenue growth of Epicor ERP of new generation (in last Epicor 9) corresponded to business revenue growth in general. In 2013 financial year increase in these indicators is expected. Also the stable growth of eksplutatsionny income at a rate on the prolonged loans around 90% was observed.

Having analyzed financial results of Solarsoft, Epicor expects to increase an indicator of an annual income by $85 million, and EBITDA — for $25 million, including $3 million for expected synergy as a result of Solarsoft acquisition. Revenues of the united company for 2012 financial year are predicted at the level of $953 million, adjusted earnings before interest contribution, taxes and depreciation charges (Adjusted EBITDA) — at the level of $246 million, and net capitalization ratio — 5.5x.

In 2012 Epicor Software announced that the latests version of the software for resource management of the enterprise of new generation Epicor ERP and Epicor iScala will be based on SQL Server platform 2012 from Microsoft.

2011: Sale to the company to the British fund Apax Partners

In 2011 the company was sold to the British investment fund Apax Partners and later is merged with other developer SOFTWARE Activant. Total amount of two purchases was about 2 billion dollars. In the amount at Activant and Epicor about 30 thousand clients and turnover of 825 million dollars. The joint corporation received the name Epicor Software Corporation and stopped being the public company. The shareholders in total owning about 32% of a share block of Epicor spoke in favor for the forthcoming transaction.

2010: Record sales in the 4th quarter

The fourth quarter 2010 became the third best quarter in the history of Epicor on income level from sale of software solutions. Revenue growth from sale of the software was 17%, and at the same time there were more than 560 new clients, and the free cash flow exceeded 51 million US dollars. In the fourth quarter income from sale of the software grew more than by 10% in comparison with the third quarter that exceeded 500,000 dollars of revenue only from sale of software solutions. Besides, the gross profit from sale of the software reached the highest level for the last five quarters in spite of the fact that closing of some transactions was postponed to 2011.

Total income for the fourth quarter 2010 grew approximately by 5% and was 117.2 million dollars in comparison with 111.9 million dollars in the fourth quarter 2009. The net income calculated on GAAP in the fourth quarter was 2010 4.4 million dollars, or 0.07 dollars on a watered action, in comparison with a similar indicator of net income in 6.7 million dollars, or 0.11 dollars on a watered action, in the fourth quarter 2009. In the fourth quarter 2010 net GAAP profit, includes 1.6 million dollars connected with expenses on reconstruction and the other costs relating first of all to acquisition in December, 2010 of Spectrum Human Resource Systems Corporation (Spectrum) and also to the reduction of labor power and corrections of means caused by increase in the expected free periods. In the fourth quarter 2010 of transaction include the profit which is about 2.4 million dollars on consulting in costs of goods and 1.3 million dollars on research and development connected with acquisition of certificates by Epicor company on activity in 2009 within the program to the Provinces of Quebec, Canada directed to issuance of credits in a cash form for stimulation of development of IT-Business in this region.

Net non-GAAP income in the fourth quarter made 2010 11.4 million dollars, or 0.19 dollars on a watered action, in comparison with a similar indicator of net income in 11.1 million dollars, or 0.19 dollars on a watered action, in the fourth quarter 2009.

Income for the fourth quarter 2010 with breakdown by sectors. Income from sale of the software in the fourth quarter was 2010 26.4 million US dollars that is 2% higher than the similar indicator received in the fourth quarter 2009 when its value was 25.8 million dollars. The consulting revenue for the fourth quarter 2010 was 35.7 million dollars and increased by 8% in comparison with a similar indicator of the fourth quarter 2009 in which its value was 33.2 million dollars. Income from technical support in the fourth quarter was 2010 49.7 million dollars and increased by 2% in comparison with a similar indicator of the fourth quarter 2009 in which its value was 48.6 million dollars. Income from sale of the equipment and an other income in the fourth quarter were 2010 5.5 million dollars, having increased by 24% in comparison with the fourth quarter of previous year when its value was 4.4 million dollars.

2009: The agreement on non-interference with Elliott Associates

On February 26, 2009 it became known that the Epicor company and a hedge fund of Elliott Associates reached the agreement which weakened tension between two companies proceeding the most part of last year. By this time the hedge fund owns, according to some information, from  11% to 14% of stocks of Epicor and debt obligations for the amount of 28 million dollars. According to the new agreement (the so-called "agreement on non-interference"), Elliot Associates is authorized to acquire up to 15% of shares of Epicor company and also debt obligations for total  amount to 100 million dollars. After that the company within a year  undertakes  not to make attempts to purchase Epicor. Let's remind that the market value  of Epicor is estimated now approximately at 165 million dollars.

Part of the signed agreement is  expansion of structure of Board of Directors Epicor from 5 to 7 people.  Major shareholders of Epicor Richard Pikap became two new directors (Richard H. Pickup) and John Dillon (John M. Dillon). As reported, they  have no relation to Elliot Associates.  Most likely, the investment fund expects  to provide thereby a greater influence on the president and the executive management of Epicor and to force the company to consider more actively the interests of the major shareholders.

 According to Jess Kohn (Jesse Cohn) managing Elliot Associates share portfolio,  the hedge fund is one of the largest shareholders and is interested in Epicor value increase. Two new shareholders as a part of Board of Directors will allow to adjust constructive dialogue with company management of Epicor.

The representative of Epicor called  input of two new shareholders in Board of Directors not imposed, and "mutually approved" the solution.

 According to George Claus (George Klaus), the chairman of the board of directors and CEO Epicor, the agreements reached with Elliot Associates  are equitable to the interests of the company and its shareholders.  Epicor will also adhere further to the strategic plans which, according to it, will lead to increase in the stock price.

2008

The attack of Elliott Associates fund with coercion to sale to the company

At the beginning of November, 2008 it became known that the hedge fund of Elliott Associates made the proposal on purchase of a controlling stake of Epicor company again, having lowered at the same time cost from 9.50 to 7.50 dollars for the stock.

Shortly before this Elliott Associates expressed the intention to acquire all shares of the company which are in circulation at the price of 9.50 dollars for an action that is about 20% higher than their current market value. Transaction amount at the same time would be 565.9 million dollars. At that time the Board of Directors of Epicor rejected this offer of Elliott Associates on sale to the company.

However in Elliott Associates did not refuse the intentions to purchase Epicor. At the same time the investment company reduced the offer from 9.50 to 7.50 dollars for the stock. In this case the cost of the transaction would be 446.8 million dollars. The offer remains in force in the forenoon on November 17 the current year.

Reduction in cost of Elliott Associates explains, on the one hand, with uncertainty of an economic situation and, respectively, lack of guarantees of observance of the planned diagram of release of releases of software products in the next two years. Besides, as it is reported to the companies are disappointed with the relation of the developer to the transaction and categorical failure from offered advantageous conditions in the letter sent Elliott Associates to Epicor corporation (especially in the light of the last financial statement of Epicor which confirmed decline in income from sale of licenses and reduction in the level of annual forecasts for income). At the same time, as it is reported, failure of the company to provide to the potential buyer its statuses of data, necessary for the analysis, minimizes a possibility of a friendly takeover. Nevertheless, according to representatives of Elliott Associates if Epicor nevertheless agrees to open the data interesting them, then final transaction amount can be increased.

Epicor rejected the arrived offer again and repeated the explanation which is put forward at initial failure.

Hedge fund of Elliott Associates, having been refused on the direct offer on Epicor purchase,  began to acquire the shares of the company which are in free circulation.  For several weeks it acquired 340 thousand shares of Epicor company at the price from 3.31 up to 4.75 dollars for the stock. As a result of Elliot became the owner  about 6.4 million stocks of Epicor company (a little more than 10% of the total cost of the company).

However owners of Epicor try not to allow acquisitions by third-party investors of a controlling stake and also actively acquire shares of the company. George Klaus, the chairman of the board of directors of Epicor, acquired 100 thousand shares at the price from 3.10 up to 3.50 dollars for the stock therefore it is the owner of 2.4 million actions. James Richardson and Michael Kelly, board members of Epicor, acquired on 10 thousand shares of the company approximately at the price of 3 dollars for an action  therefore Mr. Richardson owns 30 thousand actions, and Mr. Kelly of nearly 50 thousand actions.

At this time the Epicor company was also forced to save balance in a difficult economic situation.

Merger of NSB Retail Systems

2008  — Epicor completes merger of NSB Retail Systems.

2006: Entry into one hundred the most fast-growing those companies of the world

In  2006 Epicor was included into the list of 100 most fast-growing companies according to the Fortune magazine. In 2007 the company was mentioned by the Business 2.0 magazine in the list of 100 most fast-growing technology companies.

2005: Merger of CRS Retail Systems

2005  — CRS Retail Systems, Inc is absorbed. (IT solutions on automation of retail outlets of sales).

2004: Epicor purchases Scala

2004  — the Scala Business Solutions company is absorbed (access to clients in more than 140 countries is got).

2002: Purchase of the rights to software for purchase management of Clarus company

2002  — the rights to IT solutions of Clarus company in the field of control automation are acquired by purchases.

2001: Sale of the Platinum for Windows trademark

In 2001 the Platinum for Windows (PFW) brand later used by the American branch Sage Software was sold to Best Software company.

1999: Renaming into Epicor Software

In May, 1999 the Platinum Software Corporation company was renamed into Epicor Software Corporation.

1998: Merge to DataWorks

In 1998  there took place merge of Platinum Software Corporation and DataWorks Corporation (expansion of a line in a class of ERP systems for the industry).

1997: Absorption of the supplier of the Clientele Software CRM systems

In  1997 there took place merger of Clientele Software Inc. (supplier of CRM systems).

1992: Renaming into Platinum Software

In 1992 change of the name Platinum Holdings Corporation on Platinum Software Corporation took place.

1984: Creation of Platinum Holdings in the USA

In 1984 in the USA Platinum Holdings Corporation was formed.

1978: Development of the system of Scala and formation of the company in Sweden

1978 - development of the system of Scala and formation of the company of the same name in Sweden

1972: Foundation of the company

The company was founded in 1972.

Business in Russia

In 1991 opening of representative office of Scala in Russia and the CIS took place.

More than 15 years work at the market of Russia and the CIS countries of Epicor. In Russia and the CIS 4 offices of the company are located. The Moscow office is also the largest center of researches of developments of Epicor. Besides, there are branches in St. Petersburg, Kiev, Almaty. In the territory of Russia and the CIS 12 partners of the company work. On the account of the Russian division of Epicor more than 700 successful implementations.

Russia: myths and stereotypes

Business applications of Epicor

• ERP. Resource management systems of the enterprise (ERP) are intended for automation and optimization of production financial activities of the company due to integration of the majority of corporate data and processes in single solution for the purpose of the maximum increase in cost-efficient growth. ERP solutions of Epicor company implement these tasks, helping to create the uniform automated control system for the enterprise.

• SCM. The main objective of any supply chain  — to satisfy customers needs and to provide profit earning. The Epicor company offers a broad spectrum of solutions for supply chain management as a part of ERP systems. SCM solutions are supplemented with solutions on customer relationship management (CRM), suppliers (SRM) and the system of supply (SCE).

• Retail Management. Solutions for retail allow to increase transparency throughout all supply chain In the sector of retail the ERP solution  is more, than management of finance and personnel. It also should include the POS system, inventory management, warehouse transactions, distribution, merchandising, customer relations and also a possibility of centralized operation by information.

• Service Management. Solutions for management of service maintenance help the company to coordinate implementation of all opportunities technical and service maintenance. They help to control timely use of resources and materials in for cost minimization and achievement of the maximum return to raise customer satisfaction. The solutions Epicor for management of service maintenance conform to requirements imposed to the organization of thrifty management in service companies thanks to full-fledged management of eskalation that allows to manage the level of rendering services to clients.

• Enterprise Performance Management. Solutions for enterprise performance management (EPM) help to set the financial and operational purposes and an opportunity to provide results of activity in due time and in the necessary type. Epicor EPM offers tool kit, allowing to plan, to implement plans and to carry out information analysis both on strategic, and at the tactical level, to build activity of the company according to business objectives.

• Human Capital Management (HCM). The management system for human resources (NSM)  is a solution for strategic and coordinated management by the most valuable assets of the enterprise  — people. The solutions Epicor on management of personnel resources contain the software with all necessary functions both for centralized, and for distributed control. It allows the enterprise to provide management of a kadramin different objects in the global mode with support of observance of local requirements for payment of work and precepts of law.

• IT Service Management. Management of IT services (ITSM) helps to provide achievement of the corporate purposes and obtaining economic effect due to providing to business and IT services of the companies of set of "best practices" and means. ITSM also plays a key role in ensuring compliance to regulatory requirements. In the presence of such systems of normative legal requirements as SOX, BASEL II, COBIT, ISO/BS, and HIPAA, the organizations need to provide transparency and the reporting concerning workflows and a corporate system of accounting.

• Governance, Risk and Compliance. For some organizations compliance to legal, managerial and external standards is represented a serious problem. System implementation of management, risks assessment and observance of regulatory requirements (GRC) allows to control risks, to provide compliance to external requirements and to increase business performance. The U. S. Congress published Sarbanes-Oxley Act of 2002 (SOX) including 11 paragraphs raising the questions from the corporate liability to the reporting to independent auditors and certification on compliance to standards. SOX was focused, first of all, on the public companies of the most different sizes and at the moment gains ground in the field of private business.

• Professional Services Automation. Solutions for automation of professional services (PSA) help the companies to plan projects in advance and to make more informed decisions on use of the most suitable and available resources in the specific project. This solution allows to minimize a downtime, to raise income, it is better to plan projects and to increase the number of profitable contracts, having raised at the same time degree of customer satisfaction and personnel.

• Service-Oriented Architecture. The service-oriented architecture (SOA)  is such development approach of applications for enterprise management which provides separation of software processes into separate services with which a system can work further  — to provide their search and providing. This architecture helps to eliminate such defects of the existing development approaches of business applications as complexity, lack of flexibility and existence of weak points.

Regional business

Moscow representative office "EPIKOR SOFTVARE of the CIS LIMITED" (Cyprus) Chief representative: Gazizova Natalya Yurevna.

Epicor|Scala St. Petersburg Type of affiliation: Complete property 190000 Moika River Embankment, 58 A, office 701 Ph.: +7 (812) 718-3639 Fax: +7 (812) 718-3638

Epicor|Scala Ukraine Type of affiliation: Complete property 01033, Ukraine, Kiev, Saksagansky St. 5 office 5 Ph.: +38 (044) 230-2638 Fax: +38 (044) 230-2639

Epicor|Scala Kazakhstan Type of affiliation: Complete property 480091, Kazakhstan, Almaty Abylai Hang Ave. 135, ""White Tower International"" mailbox No. 528 Ph.: + 7 (3272) 58-1773 +7 (10 571) 360 3434 Fax: + 7 (3272) 58-1155 +7 (10 571) 360 3435

Notes

• Russian website Epicor
• Natalya Sidorova: The market is guided by more economic and effective ERP systems
• On service of hospitality
• All at once  — in Epicor
• Responsibility to the client as business principle

Opinions of analysts:

• AMR Research
• Aberdeen Group
• Forrester Research, Inc.
• Epicor in the Magic quadrant of Gartner