A couple of updates from Managing Automation on the Elliott Associates private equity takeover bid for Epicor:
First, Elliott lowered its bid by $2/share. That's almost $120MM that EPIC shareholders won't see.
Second, MA's source "revealed that at least two other potential buyers have privately expressed interest in Epicor, and said both are software companies in the same Tier 2 space as Epicor and similar in size to the ERP vendor."
Hmm.... anyone want to speculate? Infor is too big, QAD is too small ... but Consona (M2M, Intuitive, etc.) might be just right. Who's the other one? Epicor has sales of $485MM (ttm).
I guess QAD. They are almost $300M, that's pretty close. Hard to imagine that QAD, on their own, could make such an assimilation, but if they have the money, now is the time.
ReplyDeleteConsona makes sense from a go-to-market strategy standpoint. They have a direct sales force and have gotten rid of all their resellers. However, from a product standpoint, would it make sense to add another product that would compete against their own line? M2M and Intuitive already compete against Epicor's manufacturing suite. So I am going nix that idea, sorry. Instead, I am going to go out on a limb and say Sage. When I look at Sage, they will quitely wish they had a direct sales force and a manufacturing suite that could actually compete. To say that 500 actually competes in the MFG space is a joke. I guess that leaves the question of Adonix, but who knows where that is going. With $1.01 billion in sales, Sage is in the right place to make the step into selling that big juicy brisket of a solution: Epicor 9.
ReplyDeleteInteresting thought on Sage. They're obviously bigger than the leaker's quote would suggest, but it could certainly fit into their organization. They haven't done US acquisitions in a while, but in Europe they've been much more focused on niche buys of customer bases - not so much product or technology, it seems to me. So that would be a bit of a cultural shift, but not a major one (like it would be for QAD, who seems to prefer more organic growth).
ReplyDeleteI would agree with the general argument against Consona, but hey, you could say the same thing about Infor - and Consona, like Infor, is driven by bankers who don't seem to care about product overlap.
So your source(s) said that company was the same, almost exact, size as Epicor? If that is the case, that sort of limits who it could be. Personally, I think that Sage is in the "same space" as Epicor and in the grand scheme of things fits into the same revenue category as Epicor. I, of course, make up the categories in my head and they range from $480 million to $1.01 billion. Perfect.
ReplyDeleteInfor is experiencing a lot of issues with their overlap and the recent layoffs might suggest that there is inherent inefficiencies in the "buy now, worry later" philosophy.
That's what the Managing Automation source said. Who knows?
ReplyDeleteRe: Infor, that was kind of my point. If I were feeling uncharitable, I might say that these deals are driven by front-end fee-takers, who don't care much about operational issues that turn up later ;-)
IMO an acquisition outlay of $675m+ would be too much for QAD.
ReplyDeleteI would also add that the 'leak' stating other interested parties being those of a similar size to Epicor maybe a red herring.
My two cents is on Infor being a prime candidate and M2M also being another.
Outside bet; Lawson? They've probably had sufficient time to settle down following the Intentia transaction. This would arm them with a set of tools to dip down further into the SME space.
10% lay offs globally per epicor human resources... i know cause i was.
ReplyDeleteHad no idea this ERP issue was going on so heavily.
ReplyDelete