Infor bags $2bn private equity investment from Koch Equity

Cash for expansion will see Koch join Infor's private equity owners as major shareholder

Business applications conglomerate Infor has reached a deal whereby Koch Equity Development, an arm of the Koch Industries industrial conglomerate, will invest more than $2bn in the company.

The funds are intended to provide extra capital to fuel the company's growth, according to Infor, while Koch will take an undisclosed shareholding in a software company best known for its manufacturing software.

"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," said CEO Charles Phillips, hinting that the acquisitive company needs Koch's resources in order to build a unified alternative to SAP, Oracle and other major enterprise applications vendors.

He added: "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."

The company claims that, under Phillips' leadership, Infor has already invested some $2bn in design and development over the past five years, delivering more than 400 new products, 1,700 ‘integrations' and 16,000 industry features in its CloudSuite line.

Infor claims that its cloud strategy has involved building features for specific vertical sectors, rather than leaving such bespoke requirements to third-parties or the customers themselves. "Companies no longer want the expensive consulting engagements that were historically required to add industry enhancements to generic software products," the company claimed in the Koch deal announcement.

It added: "By putting thousands of micro-vertical industry features into the applications, all customers in that specific industry can share those features in a multitenant cloud environment. Applications rich in industry domain lower the cost and time of deployment and make future enhancements and upgrades far easier."

Infor's cloud strategy also relies on Amazon Web Services, which means that it can offer cloud applications without having to build its own data centres to serve customers. It claims more than 66 million users of its applications running in the cloud.

The investment from Koch will be in the form of both preferred and common equity. The company's existing private equity owners, which include Golden Gate Capital and Summit Partners, will maintain control.

"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," claimed Matt Flamini, president of Koch Equity.