Advent International’s investment in TA Associates-backed Conservice valued the utility billing software company at more than $2.5 billion, sources familiar with the deal told PE Hub.
Advent on March 16 announced it would join TA as an investor in Conservice, a utility billing and payment technology company.
The investment in Conservice will support the company in growing its portfolio of products, the announcement said.
Advent and TA will now share governance of the company as 50-50 shareholders, the people said. As part of the deal, TA sold a portion of its shares to Advent while rolling over a partial stake, creating an equal ownership structure, they said.
The company’s CEO David Jenkins and the management team will continue to own a minority stake in the company. Jenkins is the largest non-institutional investor in Conservice.
Conservice, based in Logan, Utah, works with property management companies in the US to provide customized utility billing technology. The company’s services include utility and ancillary billing, metering equipment installations and maintenance, conservation products and services, daily meter readings, energy procurement, data exchange and more.
The company’s business model is likely to remain resilient to a downturn triggered by the covid-19 outbreak, one of the sources said.
Conservice generates revenue by charging fees per unit occupied, so it processes utility payments for any apartment or house with living residents, the source said. This business model should sustain well at a time when many residents are working from home and limiting social outings, the person added.
The deal for Conservice comes as Auction.com, another company that is expected to thrive in a recession environment, prepares for a sale, sources recently told PE Hub.
Unlike many businesses that are delaying their sale processes or adjusting value expectations in the wake of the covid-19 pandemic, growing economic uncertainty could prove advantageous for T.H. Lee-backed Auction.com, an online marketplace for bank-owned residential properties.
TA first invested in Conservice in June 2016 when it purchased shares from Kayne Anderson Capital Advisors, a Los Angeles-based alternative asset manager. The asset management firm rolled over a minority stake in Conservice as part of that deal.
TA Associates and spokesperson for Advent declined to comment.
Action Item: View TA Associates’ recent form ADV.
Correction: The story corrects the spelling of Jenkins last name.