Capita PLC Agreement to sell stake in AXELOS

 
TIDMCPI 
 
This announcement contains inside information 
 
21 June 2021 
 
Capita plc 
 
Agreement to sell stake in AXELOS 
 
Capita plc ('Capita') today announces that Capita and Cabinet Office have 
agreed to sell AXELOS Limited ('AXELOS') to PeopleCert International Limited 
('PeopleCert') in a deal that values the joint venture at £380.0m on a 
cash-free, debt-free basis, representing an 11.5x multiple on 2020 EBITDA of £ 
33.1m. 
 
The sale of Capita's 51% interest in AXELOS will result in Capita receiving net 
cash proceeds of £172.5m upon completion. Prior to completion, Capita will also 
receive a cash dividend of £11.1m making total net cash receipts of £183.6m. 
 
This will provide additional liquidity to strengthen Capita's balance sheet, 
meet upcoming debt maturities and support the ongoing implementation of its 
transformation plan. 
 
As part of the PeopleCert investment in AXELOS, FTV Capital Management will 
become a minority shareholder in PeopleCert. 
 
The sale of Capita's 51% interest in AXELOS is a Class 1 transaction and the 
transaction is conditional on: the approval of Capita's shareholders, with a 
circular to be posted in due course, including a timetable for a General 
Meeting of Capita shareholders; consents and/or waivers from certain creditors 
of Capita; and clearance by the Cyprus Commission for the Protection of 
Competition. These conditions are currently expected to be satisfied in July. 
 
AXELOS was established as a joint venture between Capita (51%) and Cabinet 
Office (49%) in 2013. It is responsible for developing, enhancing and promoting 
a number of best practice methodologies primarily in project, programme and 
portfolio management, and IT and digitally enabled services, including PRINCE2 
and ITIL. 
 
The sale of AXELOS follows a strategic review of the joint venture by Capita 
and Cabinet Office and comes as Capita moves into the next phase of its 
transformation. 
 
As Capita holds a 51% interest in AXELOS, it is included in the Capita Group's 
consolidated accounts. The gross assets of AXELOS at, and the profit before tax 
for the year to, 31 December 2020, were £115.7m and £24.3m respectively. 
 
The AXELOS senior management team will be transferring with the business. 
 
Capita continues to make good progress with its planned disposals, and remains 
on track to realise combined proceeds of at least £200m this year (in addition 
to the £299m initial payment received from the sale of ESS in February). 
 
Jon Lewis, Capita's Chief Executive Officer, said: "We are very pleased to have 
agreed, alongside Cabinet Office, the sale of our joint venture AXELOS to 
PeopleCert after a competitive auction process. 
 
"Capita and Cabinet Office have partnered together to grow the business over 
the last eight years, creating significant value for us and the taxpayer. 
 
"AXELOS is an excellent example of a successful collaboration between the 
private sector and the UK Government." 
 
He added: "We announced our intention to sell our stake in AXELOS earlier this 
year, as part of our ongoing strategy to simplify and strengthen Capita." 
 
"The sale will help us simplify Capita by disposing of a non-core business, 
while the proceeds will help strengthen Capita's balance sheet, as we build 
towards a more focused, sustainable business for the long term." 
 
Barclays Bank PLC, acting through its Investment Bank ('Barclays') is acting as 
sole financial advisor to AXELOS. Goldman Sachs International is acting as 
sponsor to Capita. 
 
For more information please contact: 
 
Capita investor enquiries 
 
Stuart Morgan 
 
Director of Investor Relations 
 
Tel: [phone] 
 
Email: [e-mail] 
 
Capita media enquiries 
 
Capita external communications 
 
Tel: [phone] 
 
Email: [e-mail] 
 
LEI no. CMIGEWPLHL4M7ZV0IZ88 
 
About AXELOS 
 
AXELOS is a joint venture between Capita (51%) and Cabinet Office (49%), 
responsible for developing, enhancing and promoting a number of best practice 
methodologies used by professionals working primarily in project, programme and 
portfolio management, and IT and digitally enabled services. The methodologies, 
including ITIL, PRINCE2 and MSP are adopted by private, public and voluntary 
sectors in more than 180 countries to improve employees' skills, knowledge and 
competence in order to make both individuals and organisations work more 
effectively. Professionals at 90% of the world's leading organisations use 
AXELOS's best practice methodologies, under which 5 million people worldwide 
are certified today. The business has c.100 employees and in 2020 generated 
revenue of £42.9m and profit before tax of £24.3m. 
 
The AXELOS senior management team comprises: Mark Basham, Richard Gray, Margo 
Leach, 
 
Matthew Hunt, Catherine Newman and Jonathan Archibald. 
 
About Capita 
 
Capita is a consulting, transformation and digital services business. Every day 
our 55,000 colleagues help millions of people, by delivering innovative 
solutions to transform and simplify the connections between businesses and 
customers, governments and citizens. We partner with clients and provide the 
insight and cutting-edge technologies that give time back, allowing them to 
focus on what they do best and making people's lives easier and simpler. We 
operate in the UK, Europe, India and South Africa - and currently across six 
divisions: Customer Management; Government Services; People Solutions; 
Software; Specialist Services; and Technology Solutions, shortly to be 
simplified into three divisions. Capita is quoted on the London Stock Exchange 
(CPI.L). Further information can be found at: http://www.capita.com 
 
About PeopleCert 
 
PeopleCert is a global leader in the assessment and certification of 
professional skills, partnering with multi-national organisations and 
government bodies. PeopleCert develops and deliver market leading exams across 
200 countries every year in 25 languages, through a network of 2,500 centres 
and 30,000 venues worldwide. Since 2018, PeopleCert has been the exclusive 
Examination Institute for the delivery of AXELOS' programmes worldwide. 
 
Important Notices 
 
Barclays, which is authorised by the Prudential Regulation Authority ('PRA') 
and regulated in the United Kingdom by the Financial Conduct Authority ('FCA') 
and the PRA, is acting exclusively for AXELOS and no one else in connection 
with the potential sale and will not be responsible to anyone other than AXELOS 
for providing the protections afforded to clients of Barclays nor for providing 
advice in relation to the proposed sale or any other matter referred to in this 
announcement. 
 
Goldman Sachs International, which is authorised by the PRA and regulated by 
the FCA and the PRA in the United Kingdom, is acting exclusively for Capita and 
no one else in connection with the matters referred to in this announcement and 
will not be responsible to anyone other than Capita for providing the 
protections afforded to clients of Goldman Sachs International, or for 
providing advice in relation to the matters referred to in this announcement. 
 
ENDS 
 
 
 
END 
 
 

(END) Dow Jones Newswires

June 21, 2021 02:00 ET (06:00 GMT)