Plano-based Tyler Technologies has entered into a definitive agreement to acquire Olathe, Kansas-based NIC in an all-cash transaction valued at around $2.3 billion.

With the agreement, Tyler will acquire all outstanding shares of NIC, a digital government solutions and payments company that serves more than 7,100 federal, state, and local government agencies across the U.S. Together, the combined company will leverage the sales channels and client base of Tyler—the largest provider of integrated software and tech services to the public sector—to enhance NIC’s scale and accelerate its strategy.

NIC plan to continue operating in its Kansas home office and retaining its employees and leadership team.

“This announcement marks an exciting next chapter in our 30-year history, and one that we believe will create significant value for our government partners, employees, and stockholders,” Harry Herington, NIC’s CEO and chairman of the board, said in a statement. “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.”

Tyler has a storied history of acquiring, investing in, and growing companies. Since it began making software solutions exclusively for the public sectors in the 1990s, Tyler has sought out companies that complement its products and support its growth goals.

The NIC deal marks its largest yet. 

The companies told us that NIC has launched more official government mobile apps and mobile-friendly websites and services than any other in the U.S. Last fiscal year, NIC delivered revenues of $460.5 million and net income of $68.6 million, according to a news release. In the government payments arena, the company processed more than $24 billion in payments on behalf of citizens and governments.

That’s why Tyler expects the acquisition to accelerate its payment initiatives. 

NIC’s focus on state government makes for a highly complementary match to Tyler’s local government offerings. Tyler specializes in creating essential software and technology to help school districts—along with local, state, and federal governments—connect with their communities and other constituents.

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With the deal, NIC will expand into providing solutions to the local sector, while Tyler enhances its state and federal government relationships.

The combined company is expected to significantly expand its business with federal agencies. NIC aims to make it easier for citizens and businesses to interact with government. By helping government agencies rapidly deliver new digital solutions, citizens and businesses are given essential services like applying for unemployment insurance, submitting business filings, renewing licenses, accessing information, and more.

“The pandemic has accelerated the shift by governments to online services and electronic payments as more citizens and businesses are interacting digitally with government. NIC is uniquely positioned with its deep expertise and robust digital solutions to partner with us in making government more efficient and more accessible to citizens,” Lynn Moore, Tyler’s president and CEO, said in a statement. “Our companies share a vision for thriving, connected communities, and our cultures are extremely compatible.”

Tyler expects the NIC transaction to close in the second quarter of 2021, subject to the satisfaction of customary closing conditions.

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