Epicor agrees to be acquired by Apax Partners

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Epicor Software Corporation, provider of enterprise business software solutions for the midmarket and divisions of Global 1000 companies, has entered into a definitive agreement to be acquired by funds advised by Apax Partners, one of the world's leading private equity firms with a strong heritage of technology investment. Under the terms of the agreement, Apax will commence a tender offer to acquire all of the outstanding common stock of Epicor for US$12.50 per share in cash, followed by a merger to acquire all remaining outstanding Epicor shares at the same price paid in the tender offer.

The offer price represents a premium of 11.2% over Friday's closing stock price, an 18.9% premium over the average closing price for the previous 30 calendar days and a 34.4% premium over the average closing price for the previous 52-week period. The transaction is valued at approximately $976 million. Apax is providing 100% of the equity financing for the acquisition. Shareholders representing approximately 19% of Epicor's outstanding shares have entered into support agreements with Apax in connection with the transaction. In addition, Elliott Associates, which beneficially owns approximately 13.5% of Epicor's outstanding shares, has indicated that it supports the transaction. Apax also announced today that it has entered into an agreement to acquire Activant Solutions, Inc., a leading technology provider of business management software solutions for mid-market retail and wholesale distribution businesses. Activant is a privately held company controlled by investment funds affiliated with Hellman & Friedman, Thoma Bravo and JMI Equity. Apax intends to combine Activant and Epicor to create one of the largest global providers of enterprise applications focused on the manufacturing, distribution, services and retail sectors. Following completion of the merger, the combined company will be Epicor Software Corporation and will no longer be a publicly traded company.

"This merger is extremely positive for Epicor's customers, employees and shareholders alike," said George Klaus, Epicor Chairman, President and CEO. "It offers great value to our current stockholders and represents an endorsement of the business strategy, products and technology leadership we have established in the market. With Apax, we are partnering with one of the premier investment firms in the world and one that is very much focused on growth and delivering value to the customers of its portfolio companies. With the addition of Activant, the combined company will have over 30,000 customers, $825 million in annual revenues, and the most visionary business application software and deep vertical industry expertise in the market today. Apax is committed to growing the businesses in which they invest and has an excellent track record of working as a strategic partner with management to build great companies."

"We are extremely excited to be bringing together two of the premier enterprise software companies to create a global market leader," said Jason Wright, a Partner at Apax Partners. "Epicor is a true innovator and is extremely well positioned in the enterprise applications software space. The company not only offers deep industry-specific functionality localized and translated for all major global markets, but also unprecedented choice and flexibility through the unique ability to deliver its next-generation solutions on-premise, on-demand, hosted, or in the Cloud. Activant is a provider of comprehensive ERP and Point-of-Sale software to the distribution and retail markets predominately in North America.

"Both Epicor and Activant's customers will benefit from the combined entity's increased scale, solutions portfolio and expanded service offerings," Wright said. "Epicor will have access to additional domain expertise, particularly in wholesale distribution and automotive, hardlines, lumber and specialty retailing, while Activant will benefit from an accelerated roadmap to international operations, softlines retail functionality, and additional supply chain and manufacturing capabilities.

"In addition to the immediate product and service portfolio enhancements both companies' customers will further benefit from the strong financial backing of Apax Partners and our commitment to building the new Epicor into the global leader for enterprise business applications in manufacturing, distribution, retail and services," concluded Wright. "We look forward to partnering with the management team and to providing the resources and support that can accelerate the growth and expansion of the business and the value it creates globally."

Epicor's Board of Directors unanimously approved the transaction, which is subject to customary closing conditions including minimum levels of participation in the tender offer and regulatory approvals, and the satisfaction of the closing conditions for Apax's acquisition of Activant. Under the terms of the merger agreement, Apax will commence the tender offer no later than April 8, 2011. In the event that the minimum tender condition is not met, and in certain other circumstances, the parties have agreed to complete the transaction through a one step merger after receipt of Epicor shareholder approval. The transaction has fully-committed debt financing which will be arranged by Bank of America Merrill Lynch and RBC Capital Markets. The transaction is currently expected to close in the second quarter of 2011. Under the terms of the agreement, the Company may solicit superior proposals from third parties for a period of 30 calendar days continuing through May 4, 2011. It is not anticipated that any developments will be disclosed with regard to this process unless the Company's Board of Directors makes a decision with respect to a potential superior proposal.

There are no guarantees that this process will result in a superior proposal. Moelis & Company is acting as the exclusive financial advisor to Epicor. Wilson Sonsini Goodrich & Rosati, Professional Corporation, is acting as Epicor's legal advisor. Jefferies & Company Inc. and RBC Capital Markets are acting as financial advisors to Apax Partners. Kirkland & Ellis LLP is acting as legal advisor to Apax Partners.

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