(Reuters) – Buyout firm KKR & Co Inc (KKR.N) is exploring a sale of Epicor Software Corp that could value the U.S. enterprise resource planning software provider at close to $5 billion, including debt, people familiar with the matter said on Thursday.
Companies such as Epicor that generate recurring revenue through business software sales have been popular targets for the private equity industry. The sources said that Epicor will likely attract interest from other buyout firms.
KKR is working with an investment bank on an auction for Epicor, the sources said, cautioning that no deal is certain and requesting anonymity because the matter is confidential.
KKR declined to comment, while Epicor did not respond to a request for comment.
Based in Austin, Texas, Epicor is a provider of application software to mid-sized companies in various retail, distribution and manufacturing sectors. It has 12-month earnings before interest, taxes, depreciation and amortization of around $350 million, according to one of the sources.
KKR acquired Epicor from Apax Partners in 2016 for $3.3 billion, including debt. Apax acquired Epicor in 2011, taking it private, and merged it with another newly acquired technology peer, Activant Solutions Inc, in a $2 billion deal.
Under KKR, Epicor has been acquisitive, snapping up many small-business software vendors.
The software sector has been one of KKR’s most prominent investment areas. Its previous deals include BMC Software, Exact Software, MYOB, Epicor, Onestream, iValua and Visma.
Some technology-focused private equity firms, such as Thoma Bravo LLC and Vista Equity Partners Management LLC, devote much of their funds to investments in business software firms.
Reporting by Joshua Franklin and Chibuike Oguh in New York; Editing by Lisa Shumaker