Infor, a NYC-based enterprise software company, announced a massive $1.5 billion investment today that could be the precursor to an IPO down the road. One analyst is estimating that the valuation could be at least $60 billion.
The investment is being led by Koch Industries’ investment arm, Koch Equity Development, and Golden Gate Capital. Today’s investment comes on top of a $2 billion+ cash infusion from Koch in 2017, bringing the total raised to at least more than $3.5 billion. That’s a lot of cash.
Infor may be the largest company you never heard of with over 17,000 employees and over 9500 customers in more than 100 countries worldwide. All of those customers generated $3 billion in revenue in 2018. That’s a significant presence.
Ray Wang, founder and principal analyst at Constellation Research, told TechCrunch that based on that revenue, he believes the valuation could be in the neighborhood of $60 billion. He based that on $3 billion in revenue, while using Oracle and SAP as similar industry comparison. These companies have 20X price/earnings ratio. He adds, that would make it the largest tech IPO ever for NYC tech company if that comes to pass. Infor would not confirm this number with a spokesperson telling TechCrunch, “We cannot comment on value at this time.”
What does this company do to achieve this size and scope? It’s not unlike many other large enterprise companies, says Wang. It produces cloud software solutions around typical enterprise needs such CRM, ERP and Supply Chain Asset Management.
Daniel Newman, principal analyst at Futurum Research says that Infor, has grown rapidly through a series of acquisitions and an unusual approach to enterprise software. “What makes its approach to enterprise software unique is that rather than building software and then attempting to customize it for the unique [customer] needs, Infor takes an industry-based approach that incorporates both subtle and material capabilities to address specific industry needs that more generic ERP tools aren’t capable of out of the box,” Newman told TechCrunch.
He adds that this difference is attractive to many companies seeking ERP and Enterprise Asset Management tools that are built with their business in mind rather than completely customizing a software designed for any business in any industry.
As it turns out, Koch isn’t just an investor, it’s an Infor customer. “Koch was a customer of Infor before we became an investor in the company, and Koch Industries’ companies continue to move their most mission critical applications to Infor CloudSuites,” Jim Hannan, Executive Vice President and CEO for Enterprises at Koch Industries said in a statement.
The company, which was founded way back in 2002, has been shifting to the cloud over the last five years. It reports that over 70 percent of its revenue is now derived from cloud products, fueled in part by an aggressive acquisition strategy.
Note: There is an investor call shortly. We will update the story with any pertinent information after the call.
By Ron Miller