A group of private equity groups have lodged bids for Civica, the public sector software company that supplies most of Britain's emergency services and NHS trusts.
I have learnt that Advent, Apax Partners, Bain Capital and Cinven were among the investment firms which tabled initial offers for Civica in the last few days.
People close to the auction said the bidders were likely to try to acquire both Civica and its competitor, a unit of Northgate Information Solutions, which is owned by KKR, another investment firm, and which has also been put up for sale.
Combining the two businesses would create a powerhouse in the supply of software products and IT services to the UK public sector, a lucrative market fed by years of often-controversial outsourcing.
Currently owned by 3i, Civica is expected to be worth well in excess of the £200m for which it last changed hands in 2008. The KKR-backed business is understood to be worth a comparable sum.
Both Civica and the Northgate division rank among Britain's biggest public sector software providers, and have grown revenues despite IT spending cuts by Government departments and local authorities.
According to Civica's website, its customers include more than 90% of all local authorities, police and fire services, and more than 275 healthcare providers including 80% of Acute NHS Trusts.
A previous attempt by Civica's management to acquire the company, backed by Alchemy Partners, the buyout firm, failed in August 2007 amid volatile debt markets.
The Civica sale, which is expected to be completed first, is being run by Rothschild, while JP Morgan is overseeing the Northgate auction.
3i declined to comment.