$153M sale to Vista Equity will allow GovDelivery to step up growth

GovDelivery, which provides the technology platform and tools for nearly 2,000 government bodies to communicate with taxpayers, is being acquired for $153 million cash by Vista Equity Partners, the huge private equity firm that focuses on technology-enabled businesses.

"The plan is to continue to invest in our offices here in St. Paul, Washington, D.C., and England," said CEO Scott Burns, who founded GovDelivery in 2000, and who will remain with the company. "Vista is a world-class partner for our next phase of growth. This $153 million investment validates our strategy and is the largest single investment in a cloud-based government technology company to date."

GovDelivery, based in downtown St. Paul, employs 225 people and expects revenue of $40 million this year, up from about $35 million last year.

Vista, which says it is the largest technology investor in the world, acquired GovDelivery from Actua Corp. Actua acquired GovDelivery in 2009.

GovDelivery said it has increased revenue by nearly 600 percent since then.

Burns, 41, said Actua will get about 90 percent of the purchase price. He and almost all other employees who own stock will share the rest.

"What sets GovDelivery apart is its success helping governments reach more people through its platform," Patrick Severson, a principal at Vista Equity Partners, said in a statement. "We see effective communications as an increasingly strategic function and were impressed by the extraordinary value and unrivaled security that GovDelivery brings to its clients in this fast growing area."

GovDelivery said it is used by more public sector organizations for digital communications than all its competitors combined. The company has built a cloud-based platform for digital government communications used by over 1,800 governments.

In 2000, Burns, a Duluth native who studied economics at Dartmouth College, was a 24-year-old junior consultant at McKinsey & Co. He and his then-business partner launched GovDelivery. Today, GovDelivery software tools help local, national and international governments interact with more than 120 million-plus citizens annually on everything from getting their veterans benefits to licensing a pet.

"We're about getting the public sector information to citizens [by e-mail, text or social media] so they can access services and improve their lives," Burns said in a Star Tribune interview last year. "That's what government is supposed to do. We're proud to help government perform better. You shouldn't feel badly about reminding people when it's time to pay property taxes or to get a flu shot. Amazon and Target remind people to buy things.

"Our value proposition to our clients is getting the right message to the right people at the right time to help them do what they need to do, whether it's veterans' benefits or property taxes."

Neal St. Anthony • 612-673-7144