Koch Equity buys rest of Infor

Feb 6, 2020 | Hot Topics

It’s not as though this is a slow news week … here’s one more, super quick:

Infor, the ERP vendor, is being acquired by Koch Equity Development LLC, the investment subsidiary of Koch Industries, the huge conglomerate founded by Charles and David Koch. Koch Industries uses Infor products and has been an investor in Infor since 2017. Technically, Koch is now acquiring the portion of Infor owned by Golden Gate Capital, which was a founding investor.

Once the transaction closes, Infor will become a standalone subsidiary of Koch Industries, operated by the company’s current management team.

The CEO of Infor, Kevin Samuelson, said in a prepared statement that “Koch’s decision to acquire Infor is a strong endorsement of our product strategy and focus on creating innovative solutions for our customers. As a subsidiary of a $110 billion+ revenue company that re-invests 90% of earnings back into its businesses, we will be in the unique position to drive digital transformation in the markets we serve. We are rapidly expanding our industry-specific CloudSuites and offering customer experiences and outcomes that are well beyond what is standard in enterprise software.”

And here’s an interesting statement from Koch Industries, explaining the rationale for the deal: “Software is no longer an industry vertical; it is a disruptive layer that is transforming every facet of society,” said Jim Hannan, executive vice president and CEO of enterprises for Koch Industries. “As a global organization spanning multiple industries across 60 countries, Koch has the resources, knowledge and relationships to help Infor continue to expand its transformative capabilities.”

Financial terms of the transaction were not disclosed by the companies, but I’ve seen news reports that vaiue the deal at over $10 billion. So not cheap. The transaction is subject to customary conditions and regulatory approvals and is expected to close in the first half of 2020.

I was not aware that Koch Industries invested in technology companies, but interest by an outsider like Koch does explain some of the M&A furor that’s swirling around our little PLMish universe. They believe software is a “disruptive layer transforming … society” — who doesn’t want a piece of that potential? When an outlier like Koch is willing to spend such a huge sum, it’s no wonder others are circling as well.