Capita plc - Sale of Capita Asset Services to Link Group

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 £888 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 £888 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 £17 million one-off pension contribution) of approximately £72 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 £4.9 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 £60.0 million, and had gross assets of approximately £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.

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