Activant, a leading technology provider of business management solutions for the LBM industry, has entered into an agreement to be acquired by Apax Partners, a private equity firm with a heavy emphasis on technology investments. Apax announced the acquisition today. Activant will be merged with Epicor Software, another company Apax agreed to acquire, to create a global business software solutions provider.
A technology survey conducted by ProSales in early 2010 found that more than half of the 215 dealers surveyed used an Activant product. The acquisitions therfore may garner mixed reception from LBM dealers currently using Activant products, according to industry experts.
"It's one more change [independent dealers] will have to deal with," said Chris Rader, CEO of Rader Solutions, an information technology and management consulting firm focused on the construction and LBM industry.
Rader said that with dealers spending so little on technology, questions may arise as to whether the new company will continue to support Activant's legacy technology or whether companies will be forced to update. Legacy technology refers to older software and solutions that may no longer be produced, but are still used by dealers and supported by Activant.
"As the economy has come down quite a bit over the past four or five years for people at lumberyards, a lot of these people have stopped spending money so they are tied into these legacy products," Rader said. "They don't want to make the leap to reinvest in software because they don't have the capital."
Apax also announced it has agreed to acquire Epicor Software Corp., a provider of enterprise business software solutions for midmarket divisions of international companies. When Activant and Epicor are combined companies they will be branded under the Epicor name and will be privately held.
"We are extremely excited to be bringing together two premier enterprise software companies through this innovative transaction to create a global market leader," said Jason Wright, a Partner at Apax Partners. "Epicor is a true innovator, offering deep industry-specific functionality globally across its targeted verticals. Activant is a recognized leader in providing comprehensive Enterprise Resource Planning and Point-of-Sale software to the distribution and retail markets predominately in North America."
