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July 14, 2017

Japanese technology giant NEC mulls £900m bid for UK’s Civica

Tokyo-based technology firm NEC weighs up takeover bid of British company.

By CBR Staff Writer

Japanese technology company NEC is among three private firms showing interest in a £900million takeover bid for British software group Civica.

An auction for Civica, one of the UK’s biggest public sector software providers, began several weeks ago drawing initial offers from three firms: BC Partners, Berkshire Partners and the Swiss-based Partners group.

Civica provides outsourcing services to more than 300 local authorities, blue light organisations and government agencies around the world.

Some of its customers include the Environment Agency, which uses the software to plan a response to major flooding incidents. Civica’s software also manages one million automatic vehicle number plate checks on a daily basis for West Yorkshire Police, helps housing providers deal with their tenants and provides a platform to manage £43billion of pension funds.

Japanese technology giant NEC mulls £900m bid for UK’s Civica

NEC provides a wide range of systems and software services for the public and private sectors. Thecompany’s most recent contract included the provision of its facial recognition system to the UK’s South Wales Police force and also one to integrate internal systems for the city of Lisbon.

It is unclear how serious NEC’s interest in the company is, but it has been reported that the company has hired advisors to work on an offer.

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A spokesperson for NEC said that the company “is always considering a wide range of business possibilities, but nothing has been decided at this time.”

If the Japanese firm proceeded with a deal to buy the UK-based company, it would be seen as a vote of confidence in the UK technology sector during a period of wider economic uncertainty.

Other companies across Japan expressed their concerns about what implications Brexit could have, on the deal, with car manufacturers warning of potentially adverse consequences for their UK operations.

READ MORE: UK tech sector flies high following Brexit with record investment

Civica is seen as an appealing auction within the market for business software, with one insider, telling Sky news, that initial bids had reinforced the value that had previously been created under the ownership of OMERS Private Equity,

OMERS hired Goldman Sachs to look at a potential sale of Civica earlier in the year, after taking note of premium valuations being paid for other companies in the sector, which are similar.

The Canadian firm bought Civica in 2013 for £390m, according to Thomson Reuters LPC data.

A takeover of Civica would bring a second change to the company’s ownership in the last 10 years. Previously, it was a public company before being taken private by 3i in 200 in a £200million deal, before being bought by OMERS in 2013.

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