Accel-KKR weighs strategic options for Kerridge Commercial Systems

Charlie Taylor-Kroll , Dominic Pasteiner and Gustav Hoejmark-Jensen
20 January 2023

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Accel-KKR is assessing strategic options for Kerridge Commercial Systems, a UK-based enterprise resource planning (ERP) software provider, sources familiar with the situation said.

Possible options could include a sale or bringing in an additional private equity investor to aid growth, although there is no certainty that discussions will lead to a process, one of the sources said.

The Menlo Park, California-based mid-market fund is working with Arma Partners to consider options for the business, which provides specialist software and support services and business management solutions to trade customers, two other sources said.

Any sale process or search for a new investor is expected to take place in the second half of the year, one of the sources added.

Kerridge generated EBITDA in the region of GBP 35m-GBP 40m for FY 2022, one of the sources and an additional source said. It reported underlying EBTIDA of GBP 32.6m in the 12 months to September 2021, up from GBP 27.8m generated in the same period, according to Companies House filings. Revenues rose to GBP 124.4m from GBP 108.1m in the period.

The company is likely to attract interest from large cap sponsors in the event of a sale, such as Hg, TA Associates, Vista and Thoma Bravo, a sector banker said. A potential private equity owner could look to create value by finding cost synergies by combining Kerridge with an existing portfolio company, a banker said. The company could attract investors in some of its key regions including the US and South Africa, one of the sources added.

Accel-KKR acquired Kerridge from NVM Private Equity in 2015 for GBP 16.38m and reportedly mulled a sale process in 2018. Under Accel-KKR's ownership, Kerridge bought business management solution provider MAM Software Group in September 2019 in an all-cash transaction valued at approximately USD 154.2m. In 2020. The company also acquired IT group Infomat for an undisclosed amount.

Kerridge provides software, services and support to deliver business management solutions to trade, wholesale, manufacturing and distribution customers globally. Headquartered in Hungerford, the company has offices in UK, Ireland, Benelux, South Africa and North America and supports over 30,000 customers and worldwide distributors at over 50,000 locations.

Representatives for Accel-KKR and Arma Partners declined to comment. Kerridge Commercial Systems did not respond to requests for comment.