Koch Equity Development will acquire Golden Gate Capital’s equity stake in Infor, making the company a standalone subsidiary of Koch Industries. Current management will stay on and its headquarters will remain in New York City.
The transaction is reported to be worth some $13 billion. KED invested $2 billion in Infor in 2017, then put another $1.5 billion into the company with Golden Gate Capital in early 2019. That move kicked off talk of a possible IPO.By purchasing @Infor's outstanding equity for $13B, @Koch_Industries make the firm a standalone, well-funded subsidiary. #HR #HRTech #HRTribe Click To Tweet
That talk seems hushed now. Infor CEO Kevin Samuelson told Bloomberg being acquired by Koch was attractive, at least in the short term, because the conglomerate’s deep pockets could allow Infor to fund acquisitions of its own. “Just the access to capital, the IT perspective, working with someone who started as a customer—this was the right outcome,” he said.
Koch Industries’ Eyes on Tech
Koch Industries is often regarded as an industrial conglomerate, but the company has become increasingly active in technology ventures. Koch-controlled entities have invested more than $26 billion in technology-related ventures over the past six years, Infor said.
Holger Mueller, vice president and principal analyst for Constellation Research, regards the deal as odd but told TechCrunch it could work if Koch leaves Infor alone. “Now [we’ll have to see] if Koch can ensure Infor keeps building market-leading software, using Koch as showcase, or becomes the Koch software affiliate,” he said. “The latter would be an unfortunate outcome.”
Koch has been an Infor customer for some time. It said it will leverage the firm’s balance sheet and AA corporate credit rating “to quickly position Infor as one of the most well-capitalized companies in technology.”
Infor “will be in the unique position to drive digital transformation in the markets we serve” as a subsidiary of a company that “re-invests 90 percent of earnings back into its businesses,” Samuelson said. All told, Koch generates revenue of more than $110 billion a year.
Infor provides industry-specific CloudSuites to address operational issues for over 68,000 customers around the world. The company’s key industries include manufacturing, distribution, healthcare, the public sector, retail and hospitality. Its CloudSuite HCM provides tools for HR administration, talent management and service delivery, and offers add-ons for payroll, workforce management and analytics.
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Image: Koch Industries