Strategic View: CVC Capital Partners acquires a 50% stake in enterprise software provider Epicor from CD&R in a club deal creating equal board representation and shared governance. The transaction closed Q4 2024, with both sponsors committing to accelerate Epicor’s cloud transformation and M&A strategy.
Full story: When two PE titans share the stage, you’re witnessing a Continuation Club in action. CD&R, which acquired Epicor from KKR in 2020, brought in CVC Capital Partners as an equal partner rather than exiting entirely. This structure allows CD&R to partially monetize its investment, reset the clock on fund life, and bring in fresh capital plus CVC’s European networks to accelerate growth.
Epicor provides industry-specific ERP software to manufacturing, distribution, retail, and services companies—mission-critical systems that are painful to replace. Under CD&R’s ownership, Epicor transformed from 40% recurring revenue to 73%, with SaaS growing at 60% annually. The business model is classic software economics: high gross margins, predictable cash flows, and expansion revenue from existing customers. But to truly dominate, Epicor needs capital for acquisitions, international expansion, and R&D investment in AI-powered workflows.
Enter CVC. By structuring this as a club deal rather than a full exit, both firms align incentives around long-term value creation. CD&R retains upside if Epicor crushes its plan; CVC gains exposure to a proven asset with operational momentum. CEO Steve Murphy continues leading the company, providing continuity. This is the GP-Led Secondary trend disguised as a primary investment—CD&R essentially sold half the company to a new investor while maintaining control and conviction.
The strategic implication? Hold periods are extending. With PE firms holding assets 5.8 years on average (up from 4 years historically), continuation funds and club recapitalizations have become essential liquidity tools. LPs get partial distributions, GPs reset economics, and portfolio companies get fresh capital. It’s a win-win-win, assuming the asset truly has legs. For Epicor, the next chapter likely involves rolling up smaller vertical software providers and pushing deeper into AI-augmented ERP before a 2028-2029 exit.
Summary: CVC and CD&R’s Epicor club deal exemplifies the GP-led continuation trend, where sponsors partner rather than exit to extend hold periods and accelerate growth. This structure provides partial LP liquidity while bringing fresh capital and expertise to a software asset transitioning to cloud-based recurring revenue models.
Source: CVC, Epicor, Latham & Watkins
