Körber and KKR form strategic partnership focused on supply chain software

Körber, an international technology group, and KKR, a leading global investment firm, today announced that KKR has acquired a significant minority stake in Körber’s supply chain software business. This strategic partnership is expected to enable Körber’s supply chain software business to become a global leader with enhanced end-to-end solutions for customers worldwide, according to the announcement.

Financial terms of the transaction were not disclosed.

Körber’s supply chain software business is among the top three global warehouse management software providers, delivering customers with differentiated warehouse management solutions (WMS) for varying operational complexities through software, voice and robotics solutions, according to Körber. With over 1,300 employees, the business has grown significantly over recent years, serving a diversified mix of more than 4,200 customers in different industries across over 70 countries.

Structural trends and market forces, including e-commerce, multi-channel, and micro-fulfilment, are amplifying the need for digital solutions to handle increased volume and overcome greater supply chain complexity, Körber pointed out in explaining the context for the move. KKR will work with Körber’s supply chain software business to pursue organic and inorganic growth strategies to expand the company’s geographic footprint, accelerate the transition to SaaS, automation and robotics, as well as to develop innovative digital solutions to support customers amid increasing warehouse automation and supply chain localization, the announcement explained.

Stephan Seifert, CEO of the Körber Group, said: “I’m excited about this strategic partnership and the tremendous business opportunities evolving out of it. It is in Körber’s DNA to identify and develop attractive growth areas. With our supply chain software offerings, we strive to have a rich end-to-end application suite that provides enhanced software solutions to our customers all around the world. With KKR we have found a great business partner to accelerate our growth for supply chain software across additional products and regions. Always with one clear vision: market leadership through technology leadership for the benefit of our customers.”

Christian Ollig, Head of KKR for DACH, and Jean-Pierre Saad, Head of Technology for Private Equity in EMEA at KKR, commented: “A seamless and highly automated supply chain is business critical for enterprises of all sizes and we see significant growth potential in this market. Körber’s supply chain software business is already one of the leading providers with excellent expertise and capabilities in WMS including robotics and voice, led by an industry-leading management team. We look forward to the strategic partnership with Körber and to leveraging our experience of growth acceleration with global software businesses, as well as partnering with management, to help Körber’s supply chain software business reach its full potential in this attractive market.”

Chad Collins, CEO Software, Körber Business Area Supply Chain, added: “The strategic partnership with KKR is a great opportunity for us and we look forward to working with them and to drawing on their vast experience and track record of investing in and scaling software businesses globally. This will allow us to significantly accelerate our growth plan to build a global champion in supply chain software.”

In a briefing with Modern, Collins said the deal will result a joint venture structure for most of Körber’s supply chain software business, with the majority holder being Körber, and KKR being the other significant holder in the joint venture. The focus of the joint venture will be consistent with what Körber’s research has indicated its customers and potential customers are in need of most to excel at order fulfillment, said Collins. This includes higher-level supply chain applications such as distributed order management (DOM) and order management system (OMS) capabilities, transportation management including parcel shipping software, and supply chain planning solutions, he explained, integrated with applications such as WMS. Körber will keep enhancing its WMS software, but Collins said organizations are interested in a “broader suite” of software that functions as a holistic supply chain execution platform. “To get the perfect order fulfillment [our] customers really need those pieces from all the different systems,” said Collins.

While the size of deal isn’t being made public, Collins explained the joint venture deal is a significant step that will lead to enhanced applications and potentially, involve acquisitions. KKR, he noted, has deep experiences in mergers and acquisitions (M&A), in addition to a strong track record for growing global software businesses. Access to capital is also enhanced by this move, he added. “In order for us to broaden the suite in some of these areas that customers and prospective customers are asking for, M&A is going to be the fastest way to add that to our portfolio,” Collins said.

Some of Körber’s software consulting organizations, which do implementations of software from SAP and Blue Yonder, will stay within Körber, rather than being under the joint venture, Collins added.

KKR’s investment comes from its flagship European private equity fund, KKR European Partners Fund V, which has a long track-record in strategic partnerships with founders, corporates and management teams. KKR is one of the most active investors focused on building leading global technology enterprises, with global tech investments including Cegid, Exact Software, Cloudera, Darktrace, MYOB, Onestream, Epicor, iValua, Visma, among others. Across DACH, KKR has been investing on the ground for over 20 years primarily through strategic partnership deals such as in Axel Springer, Scout24, Wella, Unzer and SoftwareOne.

The transaction is subject to customary closing conditions and regulatory approvals.