Warburg Pincus and Carlyle Announce Agreement to Sell NEOGOV to EQT and CPP Investments

Rhea-AI Summary

Warburg Pincus and Carlyle (NASDAQ: CG) have announced an agreement to sell NEOGOV, a leading provider of HR and compliance software for U.S. public sector agencies, to EQT X fund and CPP Investments. Founded in 2000, NEOGOV serves nearly 10,000 public sector organizations across North America with its cloud-native suite supporting the complete employee lifecycle.

During their nine-year partnership, NEOGOV has significantly expanded its platform and product suite while maintaining consistent top-line growth. Warburg Pincus, having invested over $36 billion in technology companies, and Carlyle have played crucial roles in NEOGOV's strategic development and market expansion.

Positive

• Strong market position with nearly 10,000 public sector clients across North America
• Consistent top-line growth and successful platform expansion during 9-year partnership
• Strategic exit to prominent investors (EQT and CPP Investments) indicates strong business value
• Cloud-native comprehensive HR solution specifically tailored for public sector needs

Negative

• Transaction subject to regulatory approvals which could delay completion
• Potential transition risks as company changes ownership

Insights

Private Equity Analyst

Carlyle's sale of NEOGOV marks successful exit after period of growth, representing standard portfolio management for PE firms.

Carlyle and Warburg Pincus have signed a definitive agreement to sell NEOGOV, a public sector HR software provider, to EQT and CPP Investments after what appears to be a nine-year investment period. The transaction represents a typical private equity exit strategy following a period of value creation. During their ownership, NEOGOV expanded its product suite and achieved consistent top-line growth while serving approximately 10,000 public sector organizations across North America.

The sale aligns with private equity's standard investment lifecycle - where firms acquire, grow, and eventually divest portfolio companies. For Carlyle specifically, this transaction represents ordinary portfolio management rather than a transformative event given the firm's diverse holdings. While financial terms weren't disclosed, the transaction likely contributes positively to Carlyle's realized returns, though the relative impact depends on the undisclosed size of the deal and Carlyle's ownership percentage.

NEOGOV operates in the attractive government technology sector, providing cloud-native solutions for the full employee lifecycle from recruitment to compliance management. The company's focus on the public sector provides stable, recurring revenue - a highly desirable characteristic for investors. The acquisition by EQT (a global investment organization) and CPP Investments (one of the world's largest pension funds) suggests strong institutional interest in government-focused software platforms with predictable revenue streams.

Sale reflects NEOGOV's industry-leading position in purpose-built government HR and compliance software solutions, providing an essential service to public-sector agencies

NEW YORK, July 28, 2025 /PRNewswire/ -- Funds managed by Warburg Pincus LLC, the pioneer of global growth investing, and global investment firm Carlyle (NASDAQ: CG) today announced the signing of a definitive agreement to sell NEOGOV ("the Company"),a provider of HR and compliance software for U.S. public sector agencies, to EQT X fund ("EQT") and Canada Pension Plan Investment Board ("CPP Investments").

Founded in 2000 and headquartered in El Segundo, California, NEOGOV delivers purpose-built human capital management and public safety solutions to nearly 10,000 public sector organizations across North America. NEOGOV's cloud-native suite supports the full employee lifecycle – from recruitment and onboarding to performance management and compliance management – while helping agencies stay compliant with local policies and regulatory frameworks.

"During our nine-year partnership with NEOGOV, the company has meaningfully scaled its platform, expanded its product suite, and delivered consistent top-line growth while deepening its commitment to serving public sector and education customers," said Brian Chang, Managing Director, Warburg Pincus. "We are proud to have supported Shane and the NEOGOV team through a period of strong innovation and strategic execution, and we are confident that NEOGOV is well-positioned to continue to thrive and expand," added Vishnu Menon, Managing Director, Warburg Pincus.

Warburg Pincus is one of the most active growth investors in enterprise technology and cloud-based platforms and has invested more than $36 billion in technology companies since inception, such as Avalara, Businessolver, Clearwater Analytics, Crowdstrike, Experity, Infoblox, Modernizing Medicine, Net Documents, Procare, Varicent, and Vermont Information Processing. 

"It's been a privilege to support NEOGOV alongside Warburg Pincus during a period of strong growth and innovation. Shane and the team have built a platform that plays a critical role in helping public sector agencies serve their communities more effectively. We're confident NEOGOV is well positioned for continued success with EQT and CPP Investments," said Steve Bailey, Partner at Carlyle.

"We are deeply thankful to Warburg Pincus and Carlyle for their guidance and unwavering support. Their partnership has been instrumental in driving our growth and impact," said Shane Evangelist, CEO of NEOGOV.

The transaction is subject to customary conditions and approvals and is slated for completion in the coming months. Moelis & Company LLC served as exclusive financial advisor and Willkie Farr & Gallagher LLP served as legal counsel to NEOGOV. Jefferies LLC served as exclusive financial advisor and Ropes & Gray served as legal counsel to EQT and CPP Investments.

About Warburg Pincus
Warburg Pincus LLC is the pioneer of private equity global growth investing. A private partnership since 1966, the firm has the flexibility and experience to focus on helping investors and management teams achieve enduring success across market cycles. Today, the firm has more than $87 billion in assets under management, and more than 220 companies in their active portfolio, diversified across stages, sectors, and geographies. Warburg Pincus has invested in more than 1,000 companies across its private equity, real estate, and capital solutions strategies.

The firm is headquartered in New York with offices in Amsterdam, Beijing, Berlin, Hong Kong, Houston, London, Luxembourg, Mumbai, Mauritius, San Francisco, São Paulo, Shanghai, and Singapore. For more information, please visit www.warburgpincus.com or follow us on LinkedIn.

About Carlyle
Carlyle (NASDAQ: CG) is a global investment firm with deep industry expertise that deploys private capital across its business and conducts its operations through three business segments: Global Private Equity, Global Credit and Carlyle AlpInvest. With $453 billion of assets under management as of March 31, 2025, Carlyle's purpose is to invest wisely and create value on behalf of its investors, portfolio companies and the communities in which we live and invest. Carlyle employs more than 2,300 people in 29 offices across four continents.

Further information is available at www.carlyle.com. Follow Carlyle on X @OneCarlyle and LinkedIn at The Carlyle Group.

About NEOGOV
Founded in 2000 and headquartered in El Segundo, California, NEOGOV is a leading provider of cloud‑based human‑capital and compliance‑management software purpose‑built for the public sector. Its integrated Recruit, Develop, and Manage suite automates every stage of the employee lifecycle—streamlining recruitment, onboarding, talent development, payroll, time & attendance, and policy management for government agencies. Today, more than 10,000 state, local government, and higher education organizations nationwide rely on NEOGOV to attract, hire, develop, and retain talent while staying compliant. The company also operates GovernmentJobs.com—the nation's largest public sector job board—and includes brands such as PowerDMS and NEOED that extend its platform into public safety and education markets.

For more information, visit www.neogov.com.

Media Contacts

Warburg Pincus
Kerrie Cohen
Managing Director, Corporate Communications
Kerrie.cohen@warburgpincus.com

Carlyle
Brittany Bensaull
Global Head of Corporate Communications
Brittany.Bensaull@Carlyle.com 

NEOGOV
Scott Jensen
Vice President of Marketing
Sjensen@neogov.net

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SOURCE Warburg Pincus

FAQ

What is the significance of Warburg Pincus and Carlyle selling NEOGOV to EQT and CPP Investments?

The sale represents a successful exit after a 9-year partnership during which NEOGOV achieved significant platform expansion and consistent top-line growth, serving nearly 10,000 public sector organizations.

How many public sector organizations does NEOGOV serve?

NEOGOV serves nearly 10,000 public sector organizations across North America with its HR and compliance software solutions.

What services does NEOGOV provide to public sector agencies?

NEOGOV provides cloud-native human capital management and public safety solutions, covering recruitment, onboarding, performance management, and compliance management, while ensuring adherence to local policies and regulatory frameworks.

When is the NEOGOV acquisition expected to complete?

The transaction is expected to complete in the coming months, subject to customary conditions and approvals.

How much has Warburg Pincus invested in technology companies?

Warburg Pincus has invested more than $36 billion in technology companies since inception, including investments in companies like Avalara, CrowdStrike, and Clearwater Analytics.