digibyte - Infor confirms $2 billion+ investment by Koch

Profile picture for user slauchlan By Stuart Lauchlan November 15, 2016
Summary:
Koch Industries investment arm is taking a $2 billion+ stake in Infor, ending speculation that the cloud firm might be up for sale completely.
Charles Phillips Infor
Charles Phillips

As rumored earlier this week, Koch Equity Development LLC (KED), the investment and acquisition subsidiary of Koch Industries, is taking a stake in Infor, to the tune of more than $2 billion.

Infor says that the investment by the US's second largest privately-held company will provide:

access to additional growth capital to accelerate innovation, expand distribution, and continue disrupting the enterprise applications industry.

Charles Phillips, Infor CEO, says:

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.

KED will have the right to appoint four out of nine directors of the Infor parent company. Matt Flamini, KED’s President, says:

The support we are providing to Infor marks one of the largest investments KED has ever made and demonstrates the confidence we have in Infor’s technology, team and business model.

But Infor’s existing shareholders, including Golden Gate Capital, Summit Partners, and Management will maintain control of the company. David Dominik, Managing Director of Golden Gate Capital, which made its first investment in Infor in 2002, comments:

We are extremely pleased with the progress the Infor team has made in scaling and executing into the massive opportunity in enterprise technology applications. KED’s investment is a tremendous endorsement and we look forward to working together with them and supporting management as they continue delivering industry-leading software applications to a growing list of world class customers.

My take

This puts an end to speculation of an outright sale of Infor and provides Golden Gate Capital and other shareholders with additional investment partners. Infor has spent around $2 billion since Phillips came on board on overhauling and upgrading its offerings, so having access to extra money for further expansion will clearly be welcome. For Koch, it's a further expansion of its footprint in the software and technology sectors. It looks like a win-win-win scenario.