The transaction is initially worth 104.5m pounds ($201m), and generates cash proceeds of 8.1 times the initial investment and an internal rate of return of 254% per annum. The final consideration could increase the transaction proceeds by up to a further 5.5m pounds ($10.6m).
Vivista is based in Chippenham, Wiltshire, and has offices around the UK. It is a relatively new company that was formed to acquire Securicor Information Systems (founded in 1971) in a 20.5m pounds ($39.4m) management buy-out back in May 2003.
The sale marks a sizeable return on investment for Kleinwort Capital Ltd, which initially funded Vivista with approximately 9m pounds ($17.3m). Speaking to ComputerWire, Steven Clarke, the director of the investment team who led the investment would not break down the exact details of the transaction, but stated the directors and senior managers of Vivista were minority shareholders, while Kleinwort was the majority shareholder.
Vivista supplies ICT (information communication technology) and business support products to the UK public safety, criminal justice and local government market. It has roughly 600 staff, and its product range includes communication systems (voice and data), command-and-control systems, custody-management systems, record management systems and case-preparation systems as well as outsourced ICT managed services.
Chris Williams, the head of the TMT Corporate Finance Team at Deloitte that acted as a financial adviser, revealed to ComputerWire, SunGard has a strong government business in its own right, and it wants to build a similar unit in the UK, and in Europe. SunGard is a highly acquisitive group with about sixty or seventy acquisitions in their history. I won’t be surprised if they brought more companies in this sector, either in the UK or in Europe.
Under the terms of the deal, Vivista will become an operating unit of SunGard Higher Education and Public Sector Systems, an operating group of SunGard based in Wayne, Pennsylvania, in the US.
The transaction itself is not expected to have any impact on Vivista’s day-to-day operations, with staff and management remaining unaffected. Bruce Brain will continue as Chief Executive reporting to Bob Clarke, Group CEO of SunGard Public Sector Group.
Wayne, Pennsylvania-based SunGard reported a net profit of $111.9m for the three months ended December 31, 2004, down from $112m in 2003, on revenue before reimbursements that grew 15% to $815.7m. In the full year period, net profit was up 22.5% to $453.6m, on revenue before reimbursements that grew 20.5% to $3.46bn.
Sales at Vivista for the current financial year (just ended) are expected to be in the 90m pounds ($173m) region.
