NEC acquires UK-based IT services company Northgate Public Services
Accelerating the expansion of international safety business
Tokyo, January 9, 2018 – NEC Corporation (NEC; TSE: 6701) today announced the acquisition of UK-based IT services company Northgate Public Services Limited (NPS), accelerating the expansion of its international safety business. NEC is buying NPS for GBP 475 million from leading international private equity firm Cinven. This acquisition is expected to be completed by the end of January 2018.
Established in 1969, Northgate Public Services develops software and services for the public sector, mainly in the UK, and employs approximately 1,400 software engineers throughout the UK and India. NPS works closely with the British police and government organizations to deploy its business platform across a broad client base that includes local police forces, tax collection offices, social security offices and housing authorities.
NEC’s international safety business capitalizes on biometrics technologies, including face recognition and fingerprint recognition technologies that have been evaluated as the world’s most accurate (*1), and provides identification systems to more than 30% of state police forces in the United States (*2).
NEC’s proven track record of providing more than 700 systems in over 70 countries around the world, mainly in areas such as identification and immigration control, has contributed to the realization of safer and more secure communities.
In the future, NEC aims to leverage artificial intelligence (AI) to quickly detect fraudulent requests or applications across its public institutions client base and will seek to provide innovative solutions that create social value. In the UK in particular, NEC sees significant opportunity related to the government’s promotion of a digital strategy focused on administrative service improvement and cost reduction through visualization of administrative costs and bringing services online.
“We are proud to have Northgate Public Services, one of the UK’s leading technology companies, joining the NEC Group,” said Takashi Niino, President and CEO, NEC Corporation. “With this acquisition, NEC aims to support and strengthen NPS’ technologies for police operations, establish new safety solutions based on a common business platform, and to further develop international markets largely focused on countries within the Commonwealth.”
“This is a very exciting time to be part of Northgate Public Services. Our colleagues and leadership team have worked incredibly hard over the past two years to get the Company into great shape operationally and financially, with the result that NPS is a highly attractive asset to NEC. This transaction represents a step-change in our ability to serve our clients,” said Stephen Callaghan, CEO, Northgate Public Services.
“Combined with NEC’s business, we will now be able to offer a wider suite of services and software to our existing client base, whilst also expanding in new geographies and technology sectors. I’d like to stress that we see this as simply the beginning of our next phase of development. The increased financial strength, technical capability and market access support NEC provides will allow us to accelerate our growth plans considerably and I am enthusiastic about our future prospects.”
Following the acquisition, NEC and NPS will collaborate to develop and provide safety solutions that combine solutions and technologies from both companies. Specifically, the companies will take advantage of NEC’s biometrics technology to enhance identity authentication during police operations and administrative procedures, in addition to utilizing NEC’s line-up of cutting-edge AI technologies, “NEC the WISE,” (*3) to detect social security fraud and ensure benefits are properly distributed. The companies will capitalize on real-time detection of suspicious individuals and abnormalities using NEC face recognition, intrusion detection, suspicious item detection and other image analysis techniques. NEC will also promote NPS’ solutions for police operations and public housing management solutions to markets outside the UK.
NEC focuses on the provision of social solutions and is strengthening the safety business as a key pillar in its growth strategy. Going forward, NEC will continue to develop core technologies and solutions while acquiring new clients, delivery resources, core technologies and business models through M&A and other business collaboration models. These measures are expected to contribute to the expansion of the social solutions business and improve profitability centered on the safety business.