UPDATE 3-Apax Partners to buy Epicor, Activant for $2 bln

* Says to merge Epicor, Activant

* Says to pay $976 mln for Epicor

* Says Epicor offer at 11 pct premium over Friday closing

* Epicor shares up 11 pct in early trade

(Recasts, adds analysts comments, updates share movement)

By Supantha Mukherjee and Saqib Iqbal Ahmed

BANGALORE, April 4 (Reuters) – Private equity firm Apax
Partners will buy Epicor Software Corp and
privately held Activant Solutions Inc in separate deals worth
about $2 billion.

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.

Apax will pay $976 million for Epicor, which makes
enterprise software for mid-cap companies. Activant provides
business management software to mid-market retail and wholesale
distribution businesses. Apax did not disclose the terms of the
Activant deal.

Epicor will get access to Activant’s hardlines retail,
automotive and wholesale distribution, while Activant will gain
from Epicor’s international operations, additional supply chain
and manufacturing functionality, said Jason Wright, a partner at
Apax Partners.

The new company, to be called Epicor, would have over 30,000
customers and $825 million in annual revenue.

Apax has lined up support for the deal, expected to close in
the second quarter of 2011, from a third of Epicor shareholders,
including Elliott Associates, the companies said.

Elliott, which owns a 13.5 percent stake in Epicor, had in
October 2008 made an offer to buy the company for $9.50 a share,
but later lowered its bid to $7.50. In November, it terminated
the bid.

“The deal is not surprising given Epicor had a catalyst for
a sale — Elliott International Capital Advisors Inc an activist
hedge fund,” Benchmark Co analyst Mark Schappel said.

Epicor may solicit superior proposals from third parties for
a period of 30 days, the companies said in a joint statement.

“We believe Apax’s offer is reasonable, and we don’t
anticipate a bid meaningfully above current levels,” Lazard
Capital analyst Joel Fishbein said in a research note.

“You got the normal suspects SAP and Oracle
and private equity firms (as possible rival bids). I
would consider some of the large infrastructure software
companies like Microsoft , IBM and HP as
long shots,” Benchmark’s Schappel said, adding that there is a
one out of three chance of a rival bid cropping up.

Epicor shareholders will get $12.50 a share, a premium of 11
percent to Epicor’s Friday closing of $11.24 on Nasdaq.

Apax said it has funding commitment from Bank of America
Merrill Lynch and RBC Capital Markets for the deals.

London-based Apax Partners, which manages funds of about $40
billion, recently backed software firm iGate to buy a
majority stake in India’s Patni Computer Systems for
$1.2 billion. [ID: nSGE709010]

Last month, Apax agreed to buy Yellow Media Inc’s
automotive assets for about $745 million. [ID:nL3E7EP1V6]

Epicor shares were up 11 percent at $12.48 in morning trade
on Nasdaq.
(Reporting by Supantha Mukherjee in Bangalore; Editing by
Sriraj Kalluvila)

UPDATE 3-Apax Partners to buy Epicor, Activant for $2 bln