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Civica splashes the cash on 'good fit' Web Technologies

Hopes move will boost its central gov biz

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Public sector IT outfit Civica has gobbled up IT services minnow Web Technologies Group for what is thought to be approximately £10m.

Simon Downing, chief exec of Civica, said the deal will extend Civica's capability in central government. Meanwhile, James Steventon, chief executive of WTG, said having "the backing of Civica will enable us to take our offering to the next level".

Ian Spence, analayst at Megabuyte, said the deal is a "good fit" for Civica. "WTG is just one of a number of smaller UK IT services companies, such as Kainos and BJSS, that are enjoying strong growth as government departments and local authorities increasingly look to engage with smaller suppliers, at the expense usually of the large systems integrators," he added.

In July, WTG moved into the black, reporting earnings before interest, taxes, depreciation and amortisation, or EBITDA, of £1.06m, from a loss of £414,000 two years ago.

The business counts the Home Office, Ministry of Justice, Department of Health, Foreign and Commonwealth Office, Government Digital Service, the College of Policing, and the National Crime Agency among its customers.

Back in 2013 Omers Private Equity coughed up £390m for Civica. According to Civica's Companies House filing for the year ended 2014, it made an overall loss before tax of £0.5m.

The company reported overall revenue of £220m for the full-year 2014, up from £212m the previous year.

Spence added it is not unusual for private-equity backed companies to display a low level of profit before tax due to the amount of debt financing. ®

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