By CultureBanx Team
- Infor has been fully acquired by Koch Industries for $13B
- Under Charles Phillips’ leadership as chairman of Infor’s board and previously CEO, it reported $3.2B in revenue for fiscal 2019
Koch Industries has closed on its reported $13 billion acquisition for the remaining shares of Infor. Under Charles Phillips’ leadership as chairman of Infor’s board of directors and previously CEO, the company charted its own path in the enterprise software marketplace. With healthy revenue figures as the world’s third largest enterprise resource planning (ERP) software company, they are now ready to take on competitors SAP SE (SAP +5.56%) and Oracle’s (ORCL +2.01%) hybrid cloud approach.
Why This Matters: As one of the largest privately held technology providers in the world, it had been making its mark by flying under the radar. Infor carved out a strong position in this space and reported $3.2 billion in revenue for fiscal 2019, which was just 3% higher than the prior year, according to earnings results. Research firm IDC put Infor’s market share in enterprise software at about 6%. It was able to garner this market share because it makes software that is specialized by industry, including manufacturing, government, health care and retail. Large companies across these sectors need technology to help manage their core business processes, otherwise called ERP.
Infor instantly becomes one of the most well financed IT companies in the market
The company claims to be the first ERP provider to make a complete transition to the cloud, which made it an attractive investment and acquisition target. Also, Infor’s software-as-a-service business is on track for about $800 million in annual revenue, according to Bloomberg.
Its main competitors Oracle and SAP are massive companies with a lot more capital to throw around in growing their cloud businesses. For example, Oracle acquired ERP provider NetSuite for $9.3 billion in 2016 to expand its reach in the sector. In contrast, Infor bought GT Nexus for $675 million in 2015.
Situational Awareness: When Koch Industries increased its stake in Infor a year ago, they had $6.1 billion in debt, and planned to use most of the $1.5 billion investment to refinance some of that debt. Now, the need to reduce debt basically goes away as a solely owned subsidiary of Koch Industries, as it is assuming the assets and liabilities of Infor. The best thing that comes out of this deal closing, is that Infor instantly becomes one of the most well financed IT companies in the market.
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