European private equity firm Cinven has completed the acquisition of Northgate Public Services (NPS), a provider of software, outsourcing and IT services to local government and public sector organisations.
Terms of the deal have not been disclosed.
NPS provides software and related services to UK public sector markets including Local Government, Government Agencies, Public Safety, Housing and Healthcare. Its software and services are used by over 400 UK local authorities, all UK police forces, social housing providers in the UK and internationally, and NHS hospitals. Its IT projects support the sharing of information for criminal intelligence and investigations across UK police forces and the management of health screening records in the UK and in Ireland.
For the 12 months to 30 April 2014, NPS grew revenues by 7.2% and EBITDA by 6.9% to GBP181.0 million and GBP42.0 million respectively and has shown a sustained track-record of growth.
Cinven’s TMT team regards NPS as an attractive investment on the basis of the company’s:
• well-placed market positioning with a variety of niche software applications across the UK public sector;
• stable revenues resulting from the embedded and vital nature of its software products within its customers;
• well diversified business with a customer base across local and central government, police and healthcare;
• potential growth into other related areas given NPS’ investment in a modern, Software-as-a-Service (‘SaaS’) eligibility platform which is applicable across the public sector in the UK and internationally. As a result, public sector organisations can migrate at low risk to flexible and modern IT solutions.
David Barker, Partner at Cinven, says: “We are very pleased to be working with the Northgate Public Services management team. NPS is a highly cash generative and defensive software business with market-leading positions in the UK public sector. We are excited to have the opportunity to invest in NPS as a standalone business and grow further into attractive niche markets, such as healthcare screening and the police, where the company has a good existing foothold.
“Cinven’s Fifth Fund has made several investments in Technology, Media and Telecommunications (TMT) including HEG, Visma and Ufinet. Our strong track record in the sector will allow us to share and implement best practices and insights with NPS to support the growth of the business.”
