Infor Inc., a major provider of enterprise resource management software that was weighing to go public, has been acquired by Koch Industries Inc. in a blockbuster deal announced today.

The companies didn’t disclose the financial details, but sources told Bloomberg and TechCrunch that the transaction values Infor at nearly $13 billion.

Wichita, Kansas-based Koch Industries is an industrial conglomerate with annual revenues of $110 billion. The company already owned a big part of Infor thanks to  investments that its Koch Equity Development LLC arm made in the software maker over recent years. The subsidiary poured more than $2 billion into Infor’s coffers in 2017 and last year led a $1.5 billion round for the company together with Golden Gate Capital.

Koch’s investments gave it an approximately 70% ownership stake in the software maker, according to Bloomberg’s tipster. The acquisition will see the conglomerate gain full control of Infor by acquiring its remaining equity from Golden Gate.

“GG made out pretty well on the deal,” said Dave Vellante, chief analyst at SiliconANGLE sister market research firm Wikibon and co-host of theCUBE, SiliconANGLE’s video studio. “Infor under [former Chief Executive] Charles Phillips had a good story, but Infor could really never get the investments needed to really take on Oracle and SAP. That was pretty much what GG intended: Do a rollup of companies, pick some crumbs off of Oracle and SAP’s table, bump along in the market with a differentiable story that appeals to those companies that were sick of dealing with the Big Two and eventually flip it.”

New York-based Infor generated $3.2 billion in revenues during its most recent fiscal year from 86,000 customers. The company’s flagship ERP platform, CloudSuite, has hundreds of vertical-specific modules that provide features geared toward different industries such as healthcare and manufacturing. 

The company’s efforts in the  manufacturing sector form part of the context behind Koch’s acquisition. In an interview last year, current Infor CEO Kevin Samuelson revealed that “the fastest-growing area in the cloud for us is manufacturing” and said this part of the software maker’s business had doubled revenues over the preceding year. Joining forces with Koch, which has a substantial manufacturing business and is itself an Infor customer, might give Infor a boost in the sector.

Koch made a number of earlier bets in the technology market before Infor. One of the biggest was in 2013 when it spent $7.2 billion to buy Molex, a manufacturer of fiber optic interconnection hardware. 

Infor CEO Kevin Samuelson took the reins last April after previously serving as the software maker’s chief financial officer. Seven months before the leadership change, his predecessor Charles Phillips revealed in an interview on theCUBE that he was considering taking the company public in 2019 or 2020.

Koch’s acquisition of Infor apparently doesn’t take the prospect of a stock market listing off the table. Speaking to Bloomberg, Samuelson said that the company “hasn’t ruled out that possibility for the future” but explained a sale was “more immediately appealing.” 

“My guess is they’ll need a few years to clean up the balance sheet and get the income statement in order and then an IPO,” Vellante said. “If Koch makes some smart investments, does a better job marketing the company and could show some growth, I could see Infor fetching a $20 billion to $30 billion valuation.”

The acquisition is expected to close in the first half of the year.

Photo: Infor