Austin, Texas-based private equity firm Vista Equity Partners is acquiring GovDelivery, a cloud-based government digital marketing platform, from Radnor, Pennsylvania-based Actua Corp (NASDAQ: ACTA), for $153 million in cash.
Vista Equity Partners, with offices in Austin, Chicago and San Francisco, and over $26 billion in capital commitments, is a leading private equity firm focused on investing in software and technology-enabled businesses. The firm is led by billionaire Robert F. Smith, its founder, chairman and CEO, who has an estimated net worth of $2.5 billion according to Forbes.
GovDelivery is used by more public sector organizations for digital communications than all other solutions combined, it says. The company has built an industry-leading platform for digital government communications used by over 1,800 customers, reaching over 120 million people.
The company has dramatically expanded its investment to drive accelerating value to its customers over the past 24 months, doubling its investments in product development, security, and operations.
GovDelivery launched major enhancements in 2016 to support advanced digital marketing, FedRAMP security compliance, and learning-enabled content while adding interactive text capabilities and an open source data management and open data platform through acquisitions. Over half of GovDelivery’s workforce has joined the company since January 1, 2015.
“Under the strong leadership of CEO Scott Burns, we have transformed GovDelivery into a valuable, high growth company, and are confident that the company will continue its impressive growth trajectory,” said Actua’s chief executive Walter Buckley.
“Since our acquisition of the business in 2009 for $20 million, GovDelivery has assembled a first-class management team and built out an industry-leading platform for digital government communications with a strong competitive moat. Through the execution of a highly effective growth strategy, GovDelivery has increased revenues by nearly 600 percent,” Buckley added.
“Vista is a world class partner for our next phase of growth,” said GovDelivery chief executive Scott Burns. “This $153 million investment validates our strategy and is the largest single investment in a cloud-based government technology company to date.”
“What sets GovDelivery apart is its success helping governments reach more people through its platform,” said Patrick Severson, board member and principal at Vista Equity Partners.
Actua is a publicly traded venture capital firm formerly known as ICG Group Inc. It changed its name to Actua Corp in September 2014. Actua currently operates as a multi-vertical cloud company with over 900 employees. It has a market capitalization of over $490 million.
The deal is subject to customary closing conditions and is expected to close in the fourth quarter of 2016. Upon completion, Actua expects to realize net cash proceeds of approximately $132 million. Stephens Inc. served as exclusive financial advisor to GovDelivery.
Photo: Robert F. Smith, founder, chairman and CEO of Vista Equity Partners. (Bloomberg/Getty Images)