Is Infor for sale?
Bloomberg thinks so.
Last month, it reported that Golden Gate Capital was looking to sell a minority stake in Infor.
In a more recent report, Bloomberg states that private equity firms Apax Partners, CVC Capital and Advent International are each considering a bid to acquire the company outright. Bloomberg notes that Infor probably has an enterprise value greater than $10 billion (US).
Why an Infor sale now?
Over the past few years, Infor has realigned its organization to deliver cloud-based micro-vertical solution suites to its customers.
Most of Infor’s strategically important products compete at the upper-end of the market against SAP, Oracle, Workday, Microsoft, and others. Infor might be hoping that the combination of vertical-specific functionality and multi-tenant cloud gives it a competitive advantage. Most competitors don't yet offer a comparable depth of functionality in a multi-tenant SaaS offering.
However, given its rivals’ deep pockets, it might not take long for them to catch-up. Golden Gate might believe that now is an optimal time to exit an investment its held since 2002. Further, a new owner might be prepared to invest in Infor's cloud and micro-vertical story.
Who are Apax, CVC and Advent?
Apax is an experienced investor in ERP software companies, notably those with a cloud-focus. Its experience includes Plex (2012 exit), Epicor (2016 exit), and Exact (existing).
Advent International has an extensive portfolio of technology investments, including RedPrarie (2005 exit), Unit4 (existing), and Skillsoft (2014 exit), among many others.
CVC Capital Partners is a well-capitalized private equity company. CVC doesn’t appear to have significant experience in the enterprise software space, but certainly has deep pockets.
It’s tough to tell how this plays out. Over the past few years, there’s been rampant speculation that Golden Gate Capital would look to exit via IPO. One argument is that Golden Gate is soliciting bids to gage the market’s appetite and, if receptive, hold out for an IPO. However, that seems to be overly cynical and risky. Golden Gate might want to strike while the iron is hot... and before Oracle, SAP and others catch up.