EQT and Canada Pension Plan Investment Board (CPP Investments) have agreed to purchase Neogov, a provider of HR and compliance software for US public sector agencies, from Warburg Pincus and Carlyle.
The deal places Neogov’s valuation at over $3bn, inclusive of debt, as reported by Reuters from sources familiar with the matter. However, the financial specifics of the deal were not publicly disclosed by the involved parties.
Neogov, which was established in 2000 and based in El Segundo, California, offers cloud-based human capital management solutions. The company is said to cater to approximately 10,000 public sector organisations across North America.
Its software supports various stages of the employee lifecycle, from recruitment and onboarding to performance management and compliance monitoring. This ensures adherence to local policies and regulations.
The company also runs GovernmentJobs.com, a public sector job board in the US, and manages brands like PowerDMS and NEOED, which extend its services into public safety and education sectors.
Warburg Pincus initially invested in Neogov in 2016, while Carlyle joined as a minority investor in 2021.
Neogov CEO Shane Evangelist said: “Local governments are the backbone of our communities. Our mission is to help them operate more efficiently and serve citizens more effectively. EQT and CPP Investments share our vision and bring the experience and capital to help us scale faster.
“Our priorities include advancing product innovation and AI capabilities to help public sector agencies drive increased efficiency and compliance adherence. EQT and CPP Investments’ deep expertise in software and broad network of advisors will be instrumental to supporting Neogov’s growth.”
This acquisition will see EQT X fund being invested by 60-65% when considering closed or signed investments and announced public offers, less any anticipated syndication.
EQT global technology team partner and co-head Arvindh Kumar said: “We are excited to partner with Shane and the NEOGOV team, who are operators at the highest levels. The team brings a deep understanding of the challenges that public sector agencies face, and we’re proud to support a company that has earned such trust in the public sector.”
The completion of this transaction remains subject to customary conditions and regulatory approvals, with expectations to finalise in the coming months.
Moelis & Company acted as the exclusive financial adviser for Neogov, with Willkie Farr & Gallagher providing legal counsel. EQT received exclusive financial advice from Jefferies, while legal counsel was provided by Ropes & Gray.
