Exclusive - CVC in lead to buy Epicor for more than $3 billion: sources

NEW YORK Mon Jul 28, 2014 2:06pm EDT

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NEW YORK (Reuters) - Private equity firm CVC Capital Partners Ltd has emerged as the front runner to acquire Epicor Software Corp in a deal that could value the business software company at more than $3 billion, including debt, according to people familiar with the matter.

CVC has so far prevailed over other buyout firms in the auction for Epicor, which is currently owned by private equity firm Apax Partners LLP, the people said on Monday.

Negotiations between CVC and Apax are ongoing and have not yet been finalized, the people said. They asked not to be identified because the talks are private.

CVC and Apax declined to comment, while Epicor did not respond to a request for comment.

If CVC does clinch a deal for Epicor, it would mark its second acquisition from Apax in as many months. In June, CVC and Leonard Green & Partners LP agreed to acquire consumer marketing company Advantage Sales & Marketing Inc from Apax for just over $4 billion.

Such deals underscore the willingness of private equity firms to buy companies from one another as record stock market prices make most acquisitions of publicly listed companies expensive.

Based in Austin, Texas, Epicor is a provider of application software to mid-sized companies in various retail, distribution and manufacturing sectors. It had revenue of $982 million in the 12 months to the end of March, according to Moody's Investors Service Inc.

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. In 2012, Epicor acquired Solarsoft Business Systems from private equity firm Marlin Equity Partners for $155 million.

If completed, Epicor would be CVC's second software deal this year following its investment in Prague-based security software company AVAST Software A.S. That deal valued AVAST at $1 billion.

(Additional reporting by Nadia Damouni in New York; Editing by Leslie Adler)

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