Private equity firm Anacacia Capital has snapped up a majority stake in technology and parking meter group Duncan Technologies to capitalise on a shift to smarter cities.
Duncan's main brands are parking meter and payments arm Duncan Solutions Australia and digital key management unit CIC Technology.
While terms of the transaction were not disclosed, Anacacia's latest fund targets equity investments between $10 million and $50 million.
Duncan's management team, led by Trent Loebel, and Sydney-based investment firm Alpin Group remain shareholders as part of the transaction, the parties said in a joint statement to The Australian Financial Review.
"One of the compelling features of this investment is Duncan's very deep relationships with councils and cities and working with them on developing new technologies to reduce congestion and improve traffic flow for retailers and residents," Anacacia managing director Jeremy Samuel said.
Clients listed on Duncan's website include the NSW government's office of environment and heritage, Parks Victoria and the ACT government. The company's products include parking meters, a mobile licence plate recognition system, infringement issuance, vehicle sensors and a parking enterprise management system.
Mr Loebel said the Anacacia transaction would facilitate the company's organic growth plans across several areas of its business, and the group was open to acquisitions.
"We really have quite a clear plan and a vision for the next three to five years," he added.
"This is really just the beginning for smart cities technology. There are so many opportunities to exploit and multiple technologies available to solve numerous exciting problems."
However, other companies are pushing further into the space. In July, the City of Fremantle picked rival Database Consultants Australia as a supplier to deliver a smart city parking strategy, including its smartphone parking app.
Hobart City Council last year selected listed group Smart Parking to install in-ground parking sensors across the city.
Mr Loebel said two thirds of councils in Australia used one or more of Duncan's products and the company also had a growing presence in New Zealand and Asia. Its CIC business, which automates and manages access to keys, is used by customers including the Department of Defence and real estate firm JLL, according to its website.
Mr Loebel is upbeat on CIC, saying there are opportunities for geographic expansion and to make further inroads in the private sector.
The Anacacia deal sees property business Doma Group sell out of Duncan Technologies. Anacacia, which focuses on small and medium businesses, is said to have started early dialogue with Duncan about 18 months ago.
Mr Loebel said both Duncan and CIC arms of the business were profitable and cash flow positive.
Anacacia typically buys or invests in businesses with $20 million to $250 million annual revenue and earnings of at least $3 million.
Its former investments include the now listed global language technology company Appen and timber products business Big River Industries, as well as heights safety business RISsafety and baby food company Rafferty's Garden.
The firm's areas of focus are services, consumer and industrial businesses.
Anacacia tapped strong demand to rule off a $300 million investment fund earlier this year.
Australian Financial Review