Capita sells resourcing businesses at 2.1x profits
Mon, 06 Mar 2023 | BUSINESS SALE
Capita has sold its resourcing businesses to Inspirit Capital in a deal worth £21 million. The sale of Capita Resourcing, HR Solutions and ThirtyThree comes as Capita seeks to strengthen its balance sheet and focus on its core divisions: Capital Public Service and Capita Experience.
The deal represents a 2.1x multiple of the combined businesses’ pre-tax profits of £10 million for the year ending December 31 2022, on combined revenue of £78 million. At the time, the businesses had combined gross assets of £35 million.
The firms provide human capital resourcing for UK clients in both the public and private sectors. Post-acquisition, the senior management teams and staff of all three companies will remain with their businesses.
Capita has said it expects the sale to generate cash proceeds of £17 million, including a deferred payment of around £7 million receivable on November 30 2023. The sale follows several other disposals made by the company as it seeks to refocus on its core operations, including payments processing business Pay360, Capita Translation and Interpreting, Optima Legal, Capita Commercial Insurance Services Limited (CCIS) and Capita Managing Agency Limited (CMA).
Commenting on the sale of the group’s resourcing businesses, Capita chief executive Jon Lewis said: "We are pleased to have agreed the sale of our resourcing services businesses to Inspirit Capital, following a competitive sale process. The transactions offer significant growth opportunities for the businesses, their clients and colleagues.”
"It also marks another significant step towards reducing Capita's debt, as we continue to simplify and strengthen the organisation, and become a more successful business for the long term. We remain focused on selling the majority of the remaining non-core Portfolio businesses throughout the first half of 2023 depending on general market conditions."
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