Software firm serving public sector bodies sold for £475m

A UK IT firm with an office in Glasgow and clients including the Scottish Government, Scottish Parliament and Police Scotland has been snapped up by Japanese tech giant NEC in a £475 million deal.

NEC see significant technological advantages.

Northgate Public Services (NPS) is a software and services provider to the public sector in Australia as well as the UK. It has about 30 staff in Glasgow out of about 2,000 worldwide, and will retain its name following the transaction.

NEC and NPS have ruled out any redundancies and will not embark on a board-level shake-up as part of the deal. NEC said it will use the acquisition to push into the UK and Australian markets, while putting NPS through an international expansion drive across the US and Asia.

The move calls time on Cinven’s three-year ownership of NPS, but the private equity house will remain a stakeholder in the company with a seat on the board.

Hemel Hempstead-based NPS provides software underpinning many public services, including technology that collects UK council tax and administers out-of-work benefits. It works with every police force in the UK, while it has teamed up with 95 per cent of UK local authorities.

Chief executive Stephen Callaghan said: “Combined with NEC’s business, we will now be able to offer a wider suite of services and software to our existing client base, whilst also expanding in new geographies and technology sectors. The increased financial strength, technical capability and market access support NEC provides will allow us to accelerate our growth plans considerably and I am enthusiastic about our future prospects.”

NPS technology has screened eight million babies for hearing loss, while 14 police forces use the firm to boost information exchange on victims and offenders.

Callaghan has been overhauling the business since joining in 2016, sealing contracts with the South Australia Housing Trust, Richmond and Wandsworth Councils, and West Midlands Police.

Takashi Niino, NEC president and chief executive, said the takeover will hand the company “significant technological advantages”. He said: “NPS’ excellent reputation and existing access into international markets are ideal for enabling NEC to accelerate business expansion, particularly for our world-leading biometrics and AI technology. In turn, this transaction provides NPS with the opportunity to develop its proven and market-leading software across our growing international client base in North America, Asia Pacific and other regions.”