Wow, that didn't take long. The WSJ reports Apax Partners is putting Epicor on the block, hoping to find a sucker^H^H^H^H buyer that will give them a 3x return on their investment in as many years. Not a lot of detail yet, but here's one nugget that Graveyard readers will enjoy:
I'll start the bidding at one dollar.
p.s. - got a busy day today, but I know I've got at least one stanza of poetry in me that will pay off the title of this post. Stay tuned...
UPDATE: OK, here we go, from the perspective of an outside auditor:
Once upon a business dreary, while I pondered, weak and weary,
Over many a curious volume of financial bore —
Not completely understanding, in deeper debt ever landing,
Why the owners keep demanding, dividends, fees, and ever more.
“’Tis some error,” I muttered, “standing the company increasing poor —
Only this and nothing more.”
“Profit!” said I, “thing forgotten!—profit still, if books are rotten—
Customers damned, or tempest tossed by greed and ill ashore,
Business plans of all acquiring, in deeper debt ever miring,
Execs and bankers rarely firing—tell me truly, I implore—
Who is—who is this foul firm?—tell me—tell me, I implore!”
Quoth the Raven “Epicor.”
In 2012 and 2013, Epicor issued $340 million and $350 million of new debt respectively, to fund dividends to its private-equity ownerAgain, wow. They loaded up this already-unwieldly behemoth with MORE DEBT to pay themselves, TWICE. And now, not halfway through the year, and only seven months after bringing in a quick-flip CEO, they're looking to unload it for good.
I'll start the bidding at one dollar.
p.s. - got a busy day today, but I know I've got at least one stanza of poetry in me that will pay off the title of this post. Stay tuned...
UPDATE: OK, here we go, from the perspective of an outside auditor:
Once upon a business dreary, while I pondered, weak and weary,
Over many a curious volume of financial bore —
Not completely understanding, in deeper debt ever landing,
Why the owners keep demanding, dividends, fees, and ever more.
“’Tis some error,” I muttered, “standing the company increasing poor —
Only this and nothing more.”
“Profit!” said I, “thing forgotten!—profit still, if books are rotten—
Customers damned, or tempest tossed by greed and ill ashore,
Business plans of all acquiring, in deeper debt ever miring,
Execs and bankers rarely firing—tell me truly, I implore—
Who is—who is this foul firm?—tell me—tell me, I implore!”
Quoth the Raven “Epicor.”
Nevermore... :-)
ReplyDeleteWhat are your thoughts on Infor picking up the tab?
ReplyDeleteAs in, would Infor buy them? I can't imagine they'd want to, given that in the most optimistic, friendly reading of things, they've just barely started to rationalize their existing offerings. Bringing in a couple dozen more would make quite a mess.
DeleteI assume Epicor has some PE colleagues interested somehow - or maybe a mashup with the much smaller Aptean, to make an anti-Infor?
But heck, who knows? This is just crazy.
But I thought you said Joe Cowan LinkedIn with Charles Phillips after Pervez was shipped out of town? Nice to know your satire is consistent.
ReplyDeleteJust what I've always aspired to - literary criticism!
DeleteYou'll be pleased to know, Anonymous, that I've changed "never fired" to "rarely fired" in the poem above.
Re: Pervez, I thought he stepped down to spend more time with his family...
They merged Epicor with Activant for a combined $2 billion in acquisitions. No way the $3.5 billion asking price is just for Epicor. What are both of them together, around $1 billion in revenue?
ReplyDeleteAccording to that WSJ article, "sales of $978.3 million in 2013 and ... about $1.3 billion in debt"
DeleteNote that the debt number would be half that size, and much more proportionate to sales, if Apax hadn't insisted on ruining the balance sheet to extract dividends for themselves.
So why would you pay the premium? It's a slow growth business. In their last 10-K's Epicor and Activant reported $440 and $371 million in revenues respectively. Add approximately $100 from the purchase of Solarsoft.This is a business growing at 3-4% annually.
DeleteChris Kanaracus goes through his rolodex to get every what-if buyer scenario possible (http://bit.ly/1ovXk8j) ... but I still don't get it.
ReplyDeleteMaybe a good time to dust off an old domain name I registered for fun a while back: http://www.epinforacle.com/
ReplyDeletehow about registering:
Deletehttp://www.goldengatesofhell.com
and
http://www.franciscodeathrow.com
Oh what to say, what to ignore
ReplyDeleteAbout the fate of Epicor
Their doomed merger with Activant
Will lead many perhaps to rant
“Oh what was APAX thinking of”
But now APAX has had enough
Of internal exec management bickering
Achieving little and never fixing
The little things that seem quite simple
Like implementing E9 for your own people
The execs must all now be quaking
As thoughts of the millions they would be making
Disappears and the truth must now be faced
That at long last they will be replaced
So come on Microsoft, Sage or Infor
We need someone to rescue Epicor
Bravo! Author, author!
DeleteTwo ERPs promised they could do some good,
ReplyDeleteAnd sorry I could not work without
I once'd it over, and long I stood
And looked at one as long as I could
To where it went in all my doubt;
Then took the other, as just as fair,
And having perhaps the better claim
Because it was Epicor and seemed legit;
Though as for that, and getting there
Implementation was a serious piece of _ _ _ _
And so that morning there I lay
With a balance sheet more red than black.
Oh, I kept the first for another day!
Yet knowing how way leads on to way
I doubted if I could get any cash back.
I shall be telling this with a sigh
Somewhere ages and ages hence:
Two ERPs promised what they could, and I,
I took the one less litigated by,
But will my lawsuit make any difference.
UPDATE: The WSJ reports Apax "has decided for now to retain Epicor Software Corp. after testing the market for the company" - http://online.wsj.com/articles/apax-takes-business-software-maker-epicor-off-the-block-1408139002
ReplyDeleteAs a former employee of ADP's Wholesale Distribution division, which was acquired by Prophet 21, which was acquired by Activant, which was acquired by Epicor, all I can say is "what a ride!"
ReplyDeleteGet rid of the moron CFO. She is dumber than a rock. She should working at a grocery store - at least there she could gossip away to her heart's content as she bags your stuff...
ReplyDeleteThere is clearly a mandate from Apax to sell Epicor. The company is laying people off and closing offices. The intent is to drive up earnings as quickly as possible to increase the valuation. Apax would have sold this sad bastard of a company if CVC had offered a higher price.
ReplyDeleteAs a current employee I can state that the atmosphere within the company is simply depressing. Everybody knows that their future is uncertain and that they are being treated like the proverbial mushrooms. I would estimate that at least 80% of the staff have their resumes out on the street. Anybody joining Epicor for a senior role at this time is either a friend of Joe Cowan or desperate for any job available.
So sad to see this company being driven into the ground by a bunch of incompetent execs who are only focused on their person pay-offs from a sale.
They just restated prior year results
ReplyDeleteYes, the finance team is full of dolts
With creaky, unhinged GL systems
It's hard to fire on all pistons
They have had three years now to fix
This scrambled pile of monkey tricks
But when the only thing you see
Is how much is in this for me
The easy things one could address
Are considered someone else's mess
The controller and CFO both should go
Needless to say they really blow
APAX, APAX please wake up
Or you'll have will be an empty cup
Turns out the private equity guys were not as dumb as you thought.
ReplyDeletehttps://www.wsj.com/articles/kkr-nearing-deal-to-sell-epicor-to-cd-r-led-group-11598695200
Oh man, I never said they were dumb. I said they were lining their pockets at the expense of the company and its customers. The fact that there's always another PE group 3-5 years downstream just makes that point.
Delete