LONDON: US private equity firm KKR has appointed Rothschild to sell the public sector division of its software firm Northgate Information Solutions, two sources familiar with the situation said.
The company will be auctioned to private equity firms later this year and could be worth around $600 million, the sources said.
Northgate Public Services (NPS), whose clients include Britain’s police, local government agencies and the National Health Service, is the smaller of two divisions within Northgate Information Solutions.
The other is NGA Human Resources (formerly known as NorthgateArinso) which focuses on human resources software for clients across Europe, the United States and Asia.
The sale of NPS comes after its main rival in Britain, Civica, was acquired by Canada’s OMERS Private Equity for an enterprise value of £390m ($648m) in 2013, representing slightly less than 10 times its core earnings, one of the sources said. A combination of Civica and NPS was initially explored last year when Civica’s former sponsor 3i hired Rothschild to find a new owner.
KKR, which was in turn advised by JPMorgan, was interested in merging the two companies under a new private equity investor but talks fell through, partly because such a combination would have triggered an antitrust review, said the second source who can’t be named because the matter is confidential.
Northgate, KKR and Rothschild declined to comment.
While a combination with Civica remains a possibility, other private equity funds active in the sector have already expressed interest, the first source said, adding that only a “handful of industry players” would be well-place for a tie-up.
Reuters
