Tyler Technologies Strikes $2.3B All-Cash Deal for NIC; Lynn Moore, Harry Herington Quoted

Tyler Technologies Strikes $2.3B All-Cash Deal for NIC; Lynn Moore, Harry Herington Quoted
Lynn Moore President and CEO Tyler Technologies

Tyler Technologies (NYSE: TYL), a Plano, Texas-based provider of integrated software to the public sector, has agreed to acquire NIC (Nasdaq: EGOV) for approximately $2.3 billion, or $34 in cash per share, to expand the delivery of end-to-end platforms to federal, state and local governments.

The all-cash transaction has been approved by the boards of directors of NIC and Tyler and is expected to be finalized in the second quarter of 2021, subject to approvals by NIC stockholders and regulators and other customary closing conditions, the companies said in a joint release published Wednesday.

NIC is headquartered in Olathe, Kansas, and delivers digital platforms and payment systems to more than 7,100 federal, local and state government agencies to help them facilitate the delivery of services to citizens and enterprises. The company processed more than $24 billion in payments and 400 million online transactions on behalf of agencies in 2020. NIC reported $460.5 million in revenues and $68.6 million in net income in fiscal year 2020.

“The pandemic has accelerated the shift by governments to online services and electronic payments as more citizens and businesses are interacting digitally with government,” said Lynn Moore, president and CEO of Tyler Technologies.

Moore noted that NIC’s expertise and digital platforms complement Tyler’s capabilities to help agencies improve the accessibility of government services for citizens.

“The combined vision, strength, and resources of our companies will accelerate our collective ability to provide innovative, efficient, transparent services to local, state, and federal governments,” said Harry Herington, chairman of the board and CEO of NIC.

Tyler will use approximately $700 million in existing cash and new debt to fund the transaction, which is expected to be accretive to the company’s non-GAAP earnings, earnings before interest, taxes, depreciation and amortization, free cash flow per share and recurring revenue mix in 2021. The company has secured financing commitments for a bridge facility worth $1.6 billion with Goldman Sachs Bank USA and expects to replace the facility with permanent financing prior to the deal’s closing.

Goldman Sachs & Co. and Munck Wilson Mandala respectively serve as exclusive financial adviser and legal counsel to Tyler. Cowen and Co. is NIC’s exclusive financial adviser in the transaction, while Shearman & Sterling acts as the company’s legal counsel.

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