Civica receives takeover approach

Shares in Civica rose 10 per cent on news of a takeover bid

Civica, the UK public sector outsourcing and software specialist, has received a takeover bid from an unnamed private equity company.

Shares in the company surged 10 per cent on the news, which came after it revealed an 11 per cent rise in half year sales to £62.8m.

It is not surprise that Civica has attracted the attention of private equity investors, says Ovum analyst Tola Sargeant.

‘Private equity interest in its sector has increased recently and Civica seems a suitable candidate for investment,’ she said. ‘But it is clearly too early to say whether anything will come of these discussions.’

Civica could be an attractive target because 50 per cent of revenue from its own software is recurring.

‘In some areas of the public sector business has been harder to come by, notably in enforcement where Civica’s revenues were down 18 per cent,’ said Sargeant.

‘It is all too aware that the tightening financial climate puts technology investment under increasing scrutiny across the public sector, but it remains positive about the outlook.’