Infor Scales Up Cloud Capabilities With $2Bn KED Investment
Koch Equity Development (KED) has agreed to invest a little more than USD 2 billion into cloud based application developer Infor, who is known for making sector specific products for their customers. This investment is expected to make initiatives for Infor easier, such as accelerating innovation, expansion of distribution, and creating disruptions in the enterprise applications industry.
CEO of Infor, Charles Phillips spoke of the development, saying, “Koch is one of the largest private companies in the world with diversified holdings and immense resources to support the next exciting phase of growth at Infor and we are thrilled to have their support.Some of the largest companies in the world have approached Infor looking for a modern alternative to the legacy options available for mission critical business applications. Infor has the scale and capital to provide a digital platform for the Global 5000.”
Matt Flamini, the President of KED said, Enterprise security is largely considered as the responsibility of the CIO or CISO, the C Suite executive, who defines the security architecture of an organization to ensure a greater level of protection from sophisticated cyber threats. If we look at the security landscape in the past few years, the threat variants are becoming more powerful and complex.
KED’s investment is strong validation of Infor’s strategy and growth, a journey fueled by product investment, innovation, and an entrepreneurial culture. Koch Industries is an American multinational corporation that employs 100,000 people globally and is estimated by Forbes to be the second largest privately, held company in the United States with annual revenue of approximately USD 100 billion. The investment by KED significantly strengthens Infor’s capital base and provides an entrée into a large ecosystem of businesses contemplating digital transformation.
Infor became the first company to move mission critical industry applications to the cloud, and now counts more than 66 million users of its cloud applications. The company’s double digit revenue growth in its most recent quarter was fueled by a 130 percent annual increase in SaaS revenue; more than half of Infor’s software revenues are now derived from cloud applications. The company’s unique cloud strategy uses Amazon Web Services, enabling the company to invest in deep industry functionality with capital that would otherwise be needed to maintain its own data center infrastructure. The broad set of applications running on a hyper-scale cloud with cutting-edge data science and design provide a foundation for modernizing companies in healthcare, fashion, retail, distribution, public sector, and discrete and process manufacturing.
Under Phillips’ leadership, Infor invested approximately USD 2 billion in product design and development over the last five years and delivered more than 400 new products, 1,700 integrations, and 16,000 industry features in its CloudSuite product line. Infor now has 15,000 employees and operates in more than 170 countries.
This transaction, which is subject to customary closing conditions and regulatory approvals, is expected to close in early 2017. The KED investment will be a combination of preferred and common equity. Infor’s existing shareholders, including Golden Gate Capital, Summit Partners, and Management will maintain control of the company. KED will have the right to appoint four of nine directors on the board of Infor’s parent company.
Morgan Stanley and Bank of America Merrill Lynch are serving as Infor’s lead financial advisors, and Gibson Dunn is serving as outside legal counsel. Credit Suisse also provided financial advice to the company. Kirkland & Ellis LLP is serving as outside legal advisor to Golden Gate and Summit Partners. Rothschild, Inc. is serving as exclusive financial advisor to KED, and Jones Day is serving as outside legal counsel.
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