Sovos Compliance, backed by Hg and Vista, goes to market

It’s unclear if Vista Equity, whose investment in Sovos dates to 2012, will be selling its stake alongside Hg.

Hg has put Sovos Compliance on the block, five sources familiar with the process told PE Hub.

First round bids are due in August, and William Blair and Jefferies are advising the company on its sale, the sources said.

Sovos, headquartered in Boston, Massachusetts, provides regulatory tax compliance software. The company’s software leverages the industry’s repository of more than 210 million tax rules in 13,500 plus jurisdictions across more than 200 countries, according to the company.

Hg originally invested in the company in January 2016. The firm purchased a majority stake in the company from Vista Equity, which retained a significant minority position in Sovos.

Hg invested in Sovos out of HgCapital 7 Fund. HG Capital Trust, the largest single investor in funds managed by Hg, contributed approximately £24.9 million ($28.9 million) to Sovos alongside other LPs of Hg Capital, according to a QuotedData report at the time.

It’s unclear if Vista Equity, whose investment in Sovos dates to 2012, will be selling its stake alongside Hg.

Sovos has grown through multiple add-on acquisitions in recent years, including its July purchase of value-added tax services company Accordance and its 2019 acquisition of Turkey-based Foriba.

As for new platform investments, Hg recently invested in F24, a pan-European provider of emergency notifications, crisis and incident management and critical communications, headquartered in Munich, Germany.

Separately, Vista is currently in the process of selling government software company Granicus, as PE Hub reported in July.

Spokespeople for Hg and Jefferies declined to comment. William Blair and Sovos did not return PE Hub’s requests for comment.

Action Item: Read about Vista Equity’s sale process for Granicus.

Update: Some financial details about the company that could not be confirmed have been removed from this story.