PE firms love Civica - an $800M revenue GovTech juggernaut. So why do they keep passing it around?

Disclaimer: Views expressed here are the author's own and based on public sources. The article is intended for informational purposes only. This is not financial advice. Please consult a professional for investment decisions.

Civica is not exactly a household name. In fact, it is a hidden software champion. If you live in (or do business with) the UK, chances are you have been exposed to Civica's products on multiple occasions. 

With run-rate revenues approaching £600M ($800M) - of which three-quarters from the UK - Civica's software powers thousands of local authorities, educational institutions and care providers. Civica is what is euphemistically known as a “GovTech rollup”.     

Civica is remarkable not only for its discreet ubiquity, but also for the metronomic returns it has delivered to private equity. 

Since 2008, Civica has been owned by no fewer than 4 PE firms: 

• 3i took Civica private in 2008

• In 2013, 3i exited to OMERS

• In turn, OMERS sold Civica to Partners Group in 2017

• Finally, in May 2024, Blackstone took over from Partners

During this time, Civica's revenue and operating profits have grown at CAGRs of 9% and 12%, respectively, aided in no small part by M&A. 

Realised investor MOICs have ranged 2.1x to 2.6x. This is 4-6 year holding periods. Not terrible, but not spectacular either. 

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