Private equity backers of public sector services and software player Civica are reportedly gearing up to punt or float the business early next year.
Venture capitalist 3i is reviewing its options, says the FT. This comes more than four years after 3i forked out £190m to take the one-time AIM-listed operation private.
Investment houses tend to have a three-to-five-year exit strategy and 3i has brought financial advisor Rothschild on board to explore ways to bank a return on its outlay.
Civica, which claims to deliver services and software to more than 90 per cent of UK local authorities, and to over 300 local authorities in Australia and New Zealand, is understood to be 3i's best performing investment.
The firm employed 1,635 people across 25 locations last year.
The UK customer list also covers 275 healthcare providers (80 per cent of Acute NHS Trusts), more than 250 social housing organisations and 90 per cent of police forces and fire services.
Despite the swingeing government spending cuts, Civica revenues have held up relatively well as it espoused a strategy based on trying to eke out cost savings for customers.
Sales were up 8 per cent in 2011 to £182m with £127.8m pertaining to the UK. Earning before interest, tax, depreciation and amortisation (EBITDA) grew 5 per cent to £34.8m.
Wins last year included a £34m IT outsourcing deal with Luton Borough Council and a seven-year deal for benefits services with Gloucester City Council.
Civica holding company Cornwall Topco posted an operating profit of £13.1m in the year to September 2011, but hefty bank loan and loan note interest repayments of £22.8m resulted in a loss before tax of £9.4m and a net loss of £10.5m.
Tola Sergeant, director at TechMarketView said in a blog post today that Civica's results could be "viewed favourably" by stock market investors but a management buyout led by CEO Simon Downing was another option.
"Of course a trade sale is also a distinct possibility. Civica's broad public sector footprint and IPR would put it high on many people's shopping lists.
"Business process services players would be attracted by its platforms, whilst others including new entrants from overseas, offshore IT services suppliers and ambitious rivals could be tempted by its UK public sector client base," she added.
Civica was set up through an MBO led by Downing back in 1999, and the Group business was formed from the public sector business of Sanderson Group. It floated on AIM in 2004 but delisted in 2008.
Civica did not respond to calls for comment and 3i refused to comment. ®