A Manhattan software business owner says a multimillion-dollar investment into the company will not change the company’s makeup.
CivicPlus, which provides cloud-based software for local governments, has announced a $290 million investment from private equity firm Insight Partners, CivicPlus owner Ward Morgan told The Mercury on Friday.
Morgan said he and his wife, Brenda, are “a little bit sad in a sense” that they are no longer majority owners of the business, but he said he is excited for what this partnership will mean for the CivicPlus staff and the community.
“It’s a good deal,” Morgan said. “We’re not expecting to see a whole lot of change, other than maybe accelerating our growth plans a little bit; it’s not a hostile takeover.”
Morgan said CivicPlus had an outside investor, BB Investments, as a minority partner for the past two years. BB Investments brought expertise and capital to help the company grow. Morgan said he was recently approached by some private equity firms who wanted to buy out BB Investments.
“We worked with five of them to find out if it was a good fit or not,” Morgan said. “In that, Insight rose to the top.”
Morgan said Insight Partners has experience investing in software companies, and he decided to work out a deal with them. Insight Partners bought out BB Investments and became majority investors in CivicPlus.
“I would say almost weekly I’ve been approached by companies that want to invest in us,” Morgan said. “But Insight is really the one we thought understood our mission of helping local governments be better.”
Morgan said the consultants at Insight “have bought into” the goals and mission of CivicPlus. He said his software company was facilitating acquisitions previously, but Insight “has a bigger checkbook” to help with bigger acquisitions if needed. He said the partnership will also bring experts in fields such as marketing, software development, human relations, and finance into the company’s tool box.
“It’s just like how you would maybe pay a major consulting company to come in and help make your company better and help it grow,” Morgan said. “They aren’t coming in and mandating anything, they’re just there to be a partner.”
CivicPlus provides software and technology solutions to more than 4,000 municipal governments, including the city of Manhattan. Morgan said there is really no downside to this deal.
“CivicPlus will stay headquartered in Manhattan, and there won’t be any layoffs or restructuring or anything like that,” Morgan said. “In fact, our growth plan might be accelerated a bit.”
Morgan said the people who follow the software development and technology industry are “very aware” of CivicPlus and where the business is located.
He said there is a concept called “Silicon Prairie,” which is similar to Silicon Valley in California but provides its own advantages.
“Firms that are interested in us like that we’re in the Midwest, they like our work ethic, and the cost is a little bit lower compared to Silicon Valley,” Morgan said. “It’s also relatively easy for them to come visit us and vice versa.”
Insight Partners is based in New York City. The firm raised more than $30 billion in capital commitments to benefit the more than 400 companies it serves. In a statement, managing director of Insight Partners Ryan Hinkle said CivicPlus’ Civic Experience Platform reflects the kind of industry leadership the firm seeks in its investments.
“CivicPlus is uniquely positioned to redefine the role technology plays in the relationship between local governments and their citizens,” Hinkle said.
Morgan said he got to be a little pickier when choosing a partner firm.
“It was an aggressive competition among companies that wanted a chance to invest in us, so that’s allowed us to pick a really great company,” Morgan said.