PE said to vie for $905 mln Capita asset-services sale

Private-equity firms are bidding for the asset-services business of Capita Plc, sources said.

Capita hired Goldman Sachs to run a process for the unit, sources said.

Capita is the London business-process-outsourcing and professional-services company. The company produced revenue of 4.89 billion pounds ($6.32 billion) in 2016. It employs 73,000 people.

The auction of Capita’s asset-services division is in the second round, sources said. It has attracted the interest of several PE firms, including KKR, CVC, GTCR and Aquiline, people said. Cinven and Centerbridge may also be involved. The division is expected to fetch 700 million pounds ($905 million).

The deal is composed of several different businesses that are overwhelmingly U.K.-based, one PE source said. “Capita is known for running a tight ship,” the source said. “A buyer would have to integrate the businesses and expand out of the U.K.”

In December, Capita said it would sell a majority of its asset-services division, along with other non-core businesses and cut 2,000 jobs. The asset-services unit provides shareholder, fund, debt and banking solutions, as well as trust and corporate services. Capita said it expects to complete the sale of the division during the second half.

Capita also is selling its specialist recruitment businesses, which includes Capita education recruitment, monarch, team24 and Medicare first. The recruitment business is not part of the current auction, a source said.

“Since the disposal process is proceeding currently, we will not comment on the process or valuation,” a Capita spokeswoman said, adding that the specialist recruitment company is an entirely separate process.

Capita is struggling under a Brexit-fueled slowdown, according to press reports. In March, Capita ousted CEO Andy Parker after reporting a 33 percent drop in pre-tax profit, the Financial Times reported. Parker will leave when a successor is found, the FT said. The company in 2016 posted a series of profit warnings.

Executives for KKR, Aquiline, GTCR and CVC declined comment.

Action Item: Contact Andy Parker, Capita’s CEO, at +44 20 7799 1525

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