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Conduent Sells Part of Its Gov Tech Business to Avenu

Conduent is staying in the public sector, but divesting itself of "non-core assets," according to the company.

Conduent, the large process-services company, is selling off a small chunk of its government technology business to Avenu.

The move, which Conduent referred to in a press release as part of a larger plan to divest itself from “non-core assets,” will see the company transfer six specific business areas to Avenu. But it’s not exiting the public sector, it will retain most of its government business.

“The sale of our (constituent government software solutions) business will allow us to focus on — and advance — our technology platforms that will best serve our large enterprise public sector customers and scalable business relationships,” Conduent President Dave Amoriell said in the statement.

This is a somewhat unique deal for the gov tech space; many gov tech companies that acquire other companies do so with the capital backing of a private equity firm, but most of the time they take on the entirety of a smaller company. This time it's a private equity-backed company swallowing part of a New York Stock Exchange-listed company’s business.

Avenu is a relatively new portfolio company of Mill Point Capital. In early 2017, Mill Point created a company called Government Revenue Solutions by combining several other gov tech companies. Then, in January 2018, it rebranded the company as Avenu.

Avenu’s work so far has focused on areas of local government, such as licensing and sales tax collection where opaque processes can cause customers to miss out on revenue. Its offerings include software to track goals and surface insights as well as auditing and accounting services.

Conduent is also new as a company; it spun out from Xerox to become its own corporate entity around the same time Mill Point created GRS.

Conduent’s government services are wide-ranging. It offers systems and services for electronic toll collection, online park reservations, pension administration, IT infrastructure, hunting and fishing licenses and more.

The pieces it’s selling to Avenu include:

  • Government records management
  • Criminal courthouse management and juror administration
  • Property assessment and tax collection
  • Unclaimed property collections management
  • Pension administration
  • Standalone infrastructure IT managed services
Including customers Avenu already had, the deal will give the company close to 3,000 clients in all 50 states and Canada, according to Director of Marketing Chris Ourand.

The company didn’t disclose the terms of the deal, but according to Conduent the business it’s selling to Avenu generated $113 million in revenue in 2017. According to its annual report covering Fiscal Year 2017, the entirety of its public-sector business generated $2.2 billion in revenue. So by that metric, the chunk it's selling represents about 5 percent of Conduent's public-sector business.

The two companies expect the deal to close in the third quarter of 2018.

Ben Miller is the associate editor of data and business for Government Technology. His reporting experience includes breaking news, business, community features and technical subjects. He holds a Bachelor’s degree in journalism from the Reynolds School of Journalism at the University of Nevada, Reno, and lives in Sacramento, Calif.