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Cinven sells Northgate to NEC
Posted on Wednesday, 10 January 2018 14:12
Japanese IT giant NEC is acquiring UK-based software provider Northgate Public Services from private equity player Cinven for GBP 475.00 million.

Completion is slated for the end of January 2018, upon which the target will join the buyer’s safety business.

Northgate, which will retain its name following the purchase, develops software platforms and cloud-based systems for users at every level in British police, healthcare and government organisations, which include housing authorities and social security and tax collection offices.

Credited with building the NHS organ donor register, the Hertfordshire-based company also operates Indian IT firm Rave Technologies and has clients in Australia and Ireland.

Tokyo-headquartered NEC conducts business on a much more global scale and, following the deal, plans to promote the target’s products and services to “international markets, largely focused on countries within the Commonwealth” according to chief executive Takashi Niino.

The listed conglomerate’s safety unit develops and markets what is claimed to be the world’s most accurate biometrics technologies, including the face and fingerprint recognition systems used by over 30.0 per cent of US police forces.

NEC was established as Nippon Electric in 1899 and now has over 107,000 employees worldwide.

It reported net profit of JPY 15.18 billion (USD 136.08 million) for the three months ending 30th September 2017, falling 57.1 per cent from the JPY 35.41 billion posted for the same period the previous year.

This decline can be attributed to higher operating costs and a 63.8 per cent drop in sales in the telecom carrier segment and comes despite a 3.4 per cent rise in revenue to JPY 705.56 billion in the timeframe.

As of 9th January 2018, NEC had a market capitalisation of JPY 817.89 billion.

Cinven’s sale of Northgate is the fifth largest deal targeting a UK data processing, hosting and related services company announced since January 2017, according to Zephyr, the M&A database published by Bureau van Dijk.

© Zephus Ltd