With Friday being our usual day highlighting announcements in supply chain management focused technology, we update our readers on a previous significant technology announcement.
In early February, Supply Chain Matters highlighted news related to the ERP software and Cloud based applications technology market, namely the announcement by Koch Industries that the privately-owned conglomerate intended to exercise options to acquire all of ERP technology provider Infor.
The transaction itself involved Koch Equity Development entering into a definitive agreement to acquire the remaining equity stake of Infor that was held by Golden Gate Capital. At the close of the transaction, Infor would become a standalone subsidiary of Koch Industries, and will continue to be led by the company’s current management team from its headquarters in New York City.
Earlier this week, Koch Industries announced that it has now completed the acquisition of the remaining portion of Infor from Golden Gate Capital.
The announcement further noted that the ERP provider has been a key component of Koch’s technological transformation, with more than $26 billion in technology-related investments in the past six years, transforming a global portfolio of businesses spanning multiple industries. In addition to being a prior Infor investor since 2017, Koch reiterates that the industrial conglomerate has been a key customer, implementing Infor’s Cloud applications technology across its businesses in areas that include enterprise resource planning, human resources, supply chain, asset management and finance.
The acquisition reportedly brings new key capabilities to Koch to accelerate digital transformation, while providing Infor with resources and industry knowledge to continue growing its expertise in mission critical software for industries like manufacturing, retail and distribution, among others. Additionally, Infor’s Healthcare Operations Platform and Interoperability technology extend further involvement in healthcare, where Koch companies are already engaged in connected device manufacturing, medical product purification, and hospital supplies.
While no financial terms have been disclosed related to the transaction, in its coverage of the transaction, TechCrunch cited sources indicating that the purchase price was estimated to be close to $13 billion, placing this transaction to be one of the top ten in the enterprise technology arena this year.
What This Development Implies
In 2016, when Koch Industries had initially announced a $2 billion equity investment, this blog characterized the announcement as stunning, in both the notions of a global-based manufacturing and services conglomerate’s equity stake and co-innovation partnership. Koch’s initial investment was the shot in the arm to boost market presence and to gain added learning as to the manufacturing and supply chain management challenges of large, dominant industries. With Infor now being a wholly owned operating subsidiary, the open question is how the current and future product suite of Cloud based ERP, manufacturing and in many respects, supply chain planning and logistics software technology will be positioned for both in-house digital business transformation and in ongoing technology offerings for the open market. Such elements will require more forthcoming specifics on the part of the combined management teams.
In our prior Supply Chain Matters perspective, we opined that operating as a business strategy extension of Koch Industries could imply the leveraging of Infor’s technology as an added showcase of digital transformation for internal business process, production, supply chain and ongoing product innovation needs in the industries that Koch conducts business in. The new parent may well discover new jewels in AI/ML and IoT enabled decision-making capabilities and in the Infor Nexus (former GT Nexus) B2B supply chain platform.
Any major conglomerate has the opportunity to manage its business digital transformation, but the outright owning of a Cloud ERP and enterprise software provider is something not seen before. Technology can be applied for unique industry competitiveness or for use by many manufacturers, retailers and small businesses. There could be provisions for customized development for internal operational needs while maintaining a presence as a generalized mid-market software and technology provider among multi-industries.
For existing Infor customers, there will be succinct needs for further communications and understanding of both strategy components.
Specifically, in the supply chain management and logistics technology space, the succinct question from our lens will be strategy plans related to the Infor Nexus B2B supply chain business network platform which could be the crown jewel asset.
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