For instance, Infor - on a buying spree for a decade - excels at being the ERP shopaholic. Epicor and Consona also have a pretty good record at bargain hunting for the best buys in the market. All of these firms have been committed to taking care of the diverse and often "old" customer base they absorbed. And they can, financially, because of two factors: the ERP market is experiencing healthy growth, and they have underwriters - their investors - who have stashes of cash with which to modernize and grow the companies. And with the recent purchase of Plex System by Francisco Partners, the private equity hold on ERP continues.
But not all ERPs have such rosy stories. Witness CDC Software's purchase of Ross Systems in 2003. Ross Systems was one of the earliest ERP companies; along with Cincom (founded in 1968 and still successfully out there on their own); and Ask, now owned by Infor. CDC filed for Chapter 11 bankruptcy protection in 2011.
CDC suffered in spite of their strong position in the process (healthcare and food) industries. Another example of this is AspenTech, who had leadership in oil and gas. What's the story with these two? Mismanagement? Sometimes. Missing the market beat? Maybe. But Vista Equity Partners came to the rescue and purchased CDC shares. And Aspen's investors have from time to time continued to infuse cash to sustain the company in its troubled life.
Private equity firms have been on the hunt for bargains for a long time, but recently have cast their gaze at the enterprise market for some undervalued assets. The "undervalue" designation may not be a market issue. Sometimes companies are part of mega-enterprises that just don't know how to sell or market in the software game.
