ERP vendors were one of the most sought-after acquisition targets of 2019, and appear to be equally in demand in 2020.
Infor, a cloud ERP software firm competing with the likes of Oracle and Microsoft, has been acquired by Koch Industries in a deal rumoured to have an Enterprise Value of around $13 billion (suggesting Koch have acquired around 30% at c$3.9 billion).
The move puts the $110-billion industrial conglomerate in charge of the world’s third largest ERP software company and consummates a long-standing relationship between the two firms.
Koch started using Infor’s CloudSuite for financial management as a customer, and liked it so much that one year ago made a $1.5 billion investment alongside San Francisco private equity firm Golden Gate. Now Koch is buying out the remaining stake from Golden Gate and taking full ownership of Infor, which will act as a standalone subsidiary.
Though best known for its history in petroleum, refinery and commodities trading, Koch has been increasingly investing in early-stage tech companies in robotics, cloud computing and medical devices, so it is not surprising that it should want to get a foothold in the industrial cloud market.
“Software is no longer an industry vertical; it is a disruptive layer that is transforming every facet of society,” said Jim Hannan, CEO of Enterprises for Koch Industries, in a statement. “As a global organisation spanning multiple industries across 60 countries, Koch has the resources, knowledge and relationships to help Infor continue to expand its transformative capabilities.”
Even as spending on enterprise-tech has pulled back slightly over the past year, companies developing tools for cloud ERP have stayed in hot demand, creating a robust acquisition market.
IFS and Acumatica joined forces to form global cloud ERP powerhouse under EQT ownership last June, and in January this year, private equity firm Accel-KKR completed its acquisition of Oregon-based ERP firm Springbrook Software.