Capita PLC Sale of Capita Asset Services to Link Group

 
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: [phone] 
Shona Nichols, Executive Director, Communications 
Andrew Ripper, Head of Investor Relations 
 
Media enquiries 
 
Capita Press Office Tel: [phone] 
Powerscourt Tel: [phone] and 020 7250 1446 
[e-mail] 
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 
 

(END) Dow Jones Newswires

June 23, 2017 13:19 ET (17:19 GMT)