Capita PLC Sale of Capita Asset Services to Link Group
24 June 2017 - 3:19AM
UK Regulatory
TIDMCPI
NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN WHOLE OR IN PART, IN, INTO OR
FROM ANY JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF THE
RELEVANT LAWS OF SUCH JURISDICTION
FOR IMMEDIATE RELEASE
23 June 2017
Capita plc
Sale of Capita Asset Services to Link Group for GBP888 million
Capita plc ("Capita" or the "Group") today announces the sale of the Capita
Asset Services businesses ("CAS") to Link Administration Holdings ("Link
Group") for a cash free, debt free consideration of GBP888 million.
The transaction is subject to certain regulatory and other approvals and
completion is expected in Q4 2017.
Upon completion of the sale, after the deduction of transaction expenses
(including certain separation related costs, including a GBP17 million one-off
pension contribution) of approximately GBP72 million, the net cash proceeds are
intended to be used to reduce indebtedness, including the Company's receivables
financing facility. Including the proceeds and excluding the EBITDA generated
by CAS, the pro forma net debt / EBITDA ratio would have been 1.8 times at 31
December 2016.
Commenting on the transaction, Andy Parker, Chief Executive of Capita said:
"We are delighted to announce the sale of the Capita Asset Services businesses
to Link Group. In the Autumn of last year we set out a strategy to simplify and
streamline Capita by repositioning the Group and refocusing on delivering
technology-enabled business and customer management solutions that make
business processes smarter and deliver better customer service. This disposal
is an important step in realising this strategy. We have achieved an attractive
price and the reduction in leverage is significant and ensures that Capita can
fully focus on the pursuit of what it does best: continuing to deliver
outstanding services to our clients and their customers.
"We have made good progress across all the strategic initiatives we set out at
the end of 2016. We have re-structured to become a market-facing organisation
with a renewed focus on sales, completed our disposals of non-core businesses
which will result in a significant reduction in leverage and made good progress
in improving productivity and reducing costs across the Group. The disposal of
CAS, alongside our other initiatives, makes Capita a leaner business with a
stronger balance sheet, better placed to return to profitable, sustainable
growth."
-ENDS-
Enquiries:
Capita plc
Tel: 020 7799 1525
Shona Nichols, Executive Director, Communications
Andrew Ripper, Head of Investor Relations
Media enquiries
Capita Press Office Tel: 020 7654 2399
Powerscourt Tel: 07725 565545 and 020 7250 1446
capita@powerscourt-group.com
Victoria Palmer-Moore, Peter Ogden and Ben Griffiths
Transaction Financial adviser to Capita
Goldman Sachs International
Anthony Gutman
Charlie Lytle
Jose Barreto
Chris Emmerson
Market abuse regulation
This announcement contains inside information for the purposes of Article 7 of
the Market Abuse Regulation (EU) No 596/2014.
Further information:
Capita plc
Capita is a leading UK provider of technology-enabled customer and business
process services and integrated professional support services. With 73,000
people at over 450 sites, including 98 business centres across the UK, Europe,
India and South Africa, Capita uses its expertise, infrastructure and scale
benefits to transform its clients' services, driving down costs and adding
value. Capita is quoted on the London Stock Exchange (CPI.L), with 2016
underlying revenue of GBP4.9 billion.
Further information on Capita can be found at: www.capita.com.
Capita Asset Services
CAS is a leading asset services platform, providing shareholder solutions,
corporate & private client solutions, fund solutions and banking & debt
solutions to a leading blue chip customer base. CAS has over 3,000 employees
servicing over 6,000 customers predominantly across the UK, Ireland, Jersey and
Luxembourg. For the 12 months ended 31 December 2016, CAS generated operating
profit of approximately GBP60.0 million, and had gross assets of approximately GBP
794 million as at the same date.
Link Administration Holdings (ASX Code: LNK) ("Link Group")
Link Group is a global provider of share registry, shareholder management,
analytics and fund administration. www.linkgroup.com
Disclaimers
Goldman Sachs International, which is authorised by the Prudential Regulation
Authority and regulated by the Financial Conduct Authority and the Prudential
Regulation Authority in the UK, is acting for Capita and no one else in
connection with the potential sale of the Capita Asset Services division and
will not be responsible to anyone other than Capita for providing the
protections afforded to its clients, or for giving advice in connection with
the potential sale of the Capita Asset Services division.
Important Notice
This announcement is not for release, publication or distribution directly or
indirectly, in whole or in part, into or from any jurisdiction where to do so
would constitute a violation of the relevant laws of such jurisdiction.
This announcement has been prepared for the purposes of complying with
applicable law and regulation in the United Kingdom and the information
disclosed may not be the same as that which would have been disclosed if this
announcement had been prepared in accordance with the laws and regulations of
any jurisdiction outside of the United Kingdom.
Forward looking statements
This announcement contains certain statements which are, or may be deemed to
be, "forward-looking statements". These statements are based on current
expectations and projections about future events and are naturally subject to
uncertainty and changes in circumstances. These forward-looking statements may
include statements with respect to Capita plc's business, financial condition
and results of operations. Forward-looking statements often use words such as
"anticipate", "target", "expect", "estimate", "intend", "plan", "budget",
"schedule", "forecast", "project", "goal", "believe", "hope", "aims",
"continue", "will", "may", "should", "would", "could", "subject to", or other
words of similar meaning. By their nature, forward-looking statements involve
known and unknown risks and uncertainties, because they relate to events and
depend on circumstances that will occur in the future and the factors described
in the context of such forward-looking statements in this announcement could
cause actual results, outcomes and developments to differ materially from those
expressed in, or implied by, such forward-looking statements and such
statements are therefore qualified in their entirety by the risks and
uncertainties surrounding these future expectations. Many of these risks and
uncertainties relate to factors that are beyond the entities' ability to
control or estimate precisely. Important factors that could cause actual
results, performance or achievements of Capita plc to differ materially from
the expectations of Capita plc, as applicable, include, among other things: UK
domestic and global economic and business conditions; instability in the global
financial markets, including Eurozone instability and the impact of any
sovereign credit rating downgrade or other sovereign financial issues;
market-related risks including in relation to interest rates and exchange
rates; changing demographics and market-related trends; changes in customer
preferences; changes to laws, regulation, accounting standards or taxation; the
policies and actions of governmental or regulatory authorities in the UK or the
European Union or other jurisdictions in which Capita plc operates; the ability
to attract and retain senior management and other employees; the extent of any
future impairment charges or write-downs caused by depressed asset valuations,
market disruptions and illiquid markets; the effects of competition and the
actions of competitors; exposure to regulatory scrutiny, legal proceedings,
regulatory investigations or complaints and other factors.
Although it is believed that the expectations reflected in such forward-looking
statements are reasonable, no member of Capita plc can give any assurance,
representation or guarantee that such expectations will prove to have been
correct and such forward-looking statements should be construed in light of
such factors and you are therefore cautioned not to place reliance on these
forward-looking statements which speak only as at the date of this
announcement. Capita assumes no obligation to update or correct the information
contained in this announcement (whether as a result of new information, future
events or otherwise), except as required by applicable law or regulations.
END
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