KKR & Co. is nearing a deal to sell Epicor Software Corp. to a group led by private-equity firm Clayton Dubilier & Rice LLC for around $4.7 billion, including debt, according to people familiar with the matter.
A deal for the company, which makes back-office and sales software for manufacturing, distribution, retail and service-industry customers, could be announced in the coming days, the people said. The deal isn’t final, and it could fall apart.
If the deal does go through at $4.7B, KKR would have made a hefty profit on Epicor- after buying it back in 2016 for around $3.3B, including debt, from Apax Partners, another private-equity firm.
Shares in KKR have surged 20% year-to-date and the global investment company scores a bullish Strong Buy Street consensus. That’s alongside an average analyst price target of $40, indicating 14% further upside potential lies ahead.
Oppenheimer’s Chris Kotowski recently published a buy rating on the stock while marginally reducing his price target from $40 to $39. He made the call after KKR’s earnings revealed a ‘steady performance in choppy markets.’
“As always, the earnings reports of the private equity (PE)-based alternative asset managers aren’t just about earnings but also about fund performance and fundraising, and KKR had an excellent quarter on all fronts” cheered the analyst.
He continues to see KKR as the group’s most underappreciated growth story, noting that fund performance was strong, with the flagship PE funds up 11%, real estate 2% and Infrastructure 7% linked quarter, and the three are up 14%, 13% and 30% Y/Y, respectively.
“We continue to think KKR is a very compelling investment at 14.1x enterprise value (ex net cash & investments) to our 2021E fund management DE including EBC of $1.71/share” Kotowski concluded.
Source: Wall Street Journal
