The $2.3 billion deal will almost certainly be the largest ever recorded in the gov tech space.
Two of the largest gov tech companies are merging in what will almost certainly be the biggest deal the industry has ever seen.
Tyler Technologies announced Tuesday that it was acquiring NIC for $2.3 billion. Both companies are among the handful of gov tech firms that are publicly traded, and Tyler will pay NIC stockholders $34 per share.
The move, still subject to approval by regulators and NIC’s shareholders, would combine Tyler’s extensive reach into software for local government with NIC’s traditional strength among state governments. NIC, which began in 1992 under the name Kansas Information Consortium, made inroads in its niche by offering state agencies websites and digital services for no up-front cost — instead, it profits from transaction fees.
Lynn Moore, president and CEO of Tyler, said that COVID-19 increased demand for both company’s products. In many areas, government has been forced to set up new technology in order to accommodate telework and serve citizens while minimizing in-person contact.
“The pandemic has accelerated the shift by governments to online services and electronic payments as more citizens and businesses are interacting digitally with government,” Moore said in a statement. “NIC is uniquely positioned with its deep expertise and robust digital solutions to partner with us in making government more efficient and more accessible to citizens.”
The acquisition will be the biggest in Tyler’s history, though the company is no stranger to acquisitions. In fact the company is largely the product of various mergers over the past two decades; its service areas range from courts to vital records to ERP. It bought Socrata in 2018 for about $148 million.
Another recent acquisition of note was that of MicroPact, which had created a low-code platform for application development and drew its strength from the federal government market.
Tyler’s press release said that it expects the NIC deal to “significantly expand its business with federal agencies.”
“This announcement marks an exciting next chapter in our 30-year history, and one that we believe will create significant value for our government partners, employees and stockholders,” NIC CEO Harry Herington said in the statement. “The combined vision, strength and resources of our companies will accelerate our collective ability to provide innovative, efficient, transparent services to local, state and federal governments.”
NIC pulled in $461 million in revenue in 2020, while Tyler is on track to record more than $1 billion in revenue for the fiscal year (it has yet to file its annual report).
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