Providence Strategic Growth is preparing to sell Government Brands, a provider of government software and integrated payments, sources familiar with the situation told PE Hub.
The firm hired William Blair to provide financial advice on the process, which is expected to kick off soon.
Government Brands, based in Alpharetta, Georgia, provides contactless Software-as-a-Service and payments solutions for all sizes of government entities, including municipalities, counties, states and federal agencies. The company also offers SaaS technology for court and land records, communication between government organizations and their communities, cloud-based tax and treasury software, as well as property revaluation and data verification service software.
Government Brands services entities in the United States and Canada and has over 500 employees.
The company generates $150 million in revenue and around $50 million in EBITDA, the sources said.
A sale could value the company at 20x to 24x EBITDA, or between $1 billion and $1.2 billion, they said.
Providence Strategic Growth (PSG), a growth equity firm focused on investments in lower mid-market technology companies, invested in Government Brands in 2017 out of its PSG Fund III, which closed on $1.3 billion in June 2018. PSG, founded in 2016 and incubated at Providence Equity Partners, became an independent firm in 2020.
Government Brands is one of seven investments out of the fund, joined by EverCommerce, Formstack, Jobcase, Patron Technology, Property Brands and Arcoro.
Following PSG’s investment, Government Brands completed the add-on of nCourt, the largest independent provider of payment solutions for courts and government entities. nCourt also provides payment options for traffic citations, property taxes, utilities and court fines, among other services, according to the company.
Government, risk and compliance software (GRC) has commanded increasing private equity interest in recent years.
In March, Mitratech, a provider of legal and compliance software backed by Hg and TA Associates, welcomed Ontario Teachers’ Pension Fund as an investor.
In February, Diligent Corporation, backed by Clearlake Capital, Blackstone Group, and Insight Partners, reached a $7 billion valuation and became the largest SaaS GRC company after its acquisition of Canadian-based GRC platform Galvanize, PE Hub reported then.
In September 2020, Lightyear Capital invested in ProfitSolv, creating a provider of integrated billing, payments, and software solutions
PSG recently raised its first European fund, Providence Strategic Growth Europe LP, which closed at a hard cap of €1.25 billion ($1.5 billion), in February.
Providence Strategic Growth, Government Brands, and William Blair did not respond to PE Hub’s requests for comment.
Correction: This report correctly characterizes PSG to reflect that the growth equity firm became independent from Providence Equity in 2020.