Ontario Systems has been acquired by New York-based private equity firm New Mountain Capital. With its purchase of a majority share in Ontario Systems, New Mountain Capital will replace Arlington Capital Partners as the Company’s largest investor. Terms of the transaction were not disclosed.
Indiana-based Ontario Systems provides workflow automation for clients in the healthcare, accounts receivable management (ARM), and government markets. The company has more than 600 federal, state, and municipal government clients in the U.S.
Arlington Capital Partners first invested in Ontario Systems in 2015. Arlington was the financial partner when Ontario Systems acquired Justice Systems last year. Justice Systems is a provider of court case management software and electronic payment solutions to government clients including state and municipal court systems. The deal expanded Ontario’s public sector footprint. Ontario Systems has doubled its revenue since 2015.
New Mountain Capital is a larger private equity firm than Arlington and said in a statement it plans to support Ontario’s growth trajectory, with a focus on expanding its revenue cycle management (RCM) offering. Ontario says it also plans to continue to invest in and around its Muncie, Indiana headquarters.
The transaction is expected to close at the end of this month.
The deal reflects a growing interest among private equity firms for companies in the government technology sector. Investments in govtech companies have increased in recent years as has consolidation among smaller players as mergers and acquisitions grow. Other private equity firms in the space include Bain Capital, Berkshire Partners, The GovTech Fund, and Vista Equity Partners.