Access Group buys Capita wing to enter legal market
Capita has sold its legal systems division to Access Group, for a deal representing an enterprise value of more than £56 million. The firm is still mooting the sale of its Education Software Solutions wing, as it looks to strengthen its balance sheet amid the pressures of the coronavirus crisis.
The Access Group is a software consultancy and developer company that provides fully integrated business management software. Founded in 1991, over 10,000 UK businesses and not-for-profit organisations use products and services provided by the London based firm, in order to improve their performance, profitability and growth.
Access has recently been buoyed by investment from TA Associates and Hg, and its turnover has increased 10-fold to more than £300 million in the last decade. This is largely due to the aggressive acquisition strategy it has been able to pursue with its new backing – and it completed 10 deals in 2019 alone, along with seven the year before. As it aims to move its offering for SME firms into the legal market, it has confirmed that Capita’s Eclipse Legal Systems division has become the latest part of its purchasing campaign.
Earlier in the summer, professional services firm Capita revealed it expected revenue in its Technology Solutions arm to plummet 15% in the first half of its fiscal year – while overall revenue would likely fall 10%, 5% of which directly resulted from the Covid-19 lockdown. Capita however said that it has implemented cost savings of £45 million to "mitigate the financial impact" – coinciding with a dual announcement that it was placing its Education Software Solutions (ESS) and Eclipse up for sale.
Following a strategic review of Capita’s software division over the past year, the firm had reportedly already made a decision to focus on a portfolio of core software capabilities which were better aligned with supporting its consulting, transformation and digital BPO services – a tactic which has been at the core of its turnaround in the last year. While Capita is still to confirm a deal for ESS, proceeds of the Eclipse’s £56.5 million deal on a cash and debt free basis will now be used to strengthen the group’s balance sheet.
Eclipse’s statutory profit before tax for 2019 was £5.5 million. Doug Sawers, Managing Director of Access Legal, told UK law industry site Legal Futures that the division hopes to double in turnover to £40 million in the next three years through a mixture of organic growth and acquisitions.
Access entered the market in a relatively small way last year by acquiring online legal compliance business Riliance and legal training company Socrates, but said the two deals done over the past month made it one of the top three legal software suppliers. Targeting firms with 10-500 employees, Access now has more than 3,500 legal clients.
