Capita agrees to sell Secure Solutions and Services
Capita has announced that it has agreed to sell its Secure Solutions and Services business to NEC Software Solutions UK. The news comes as Capita continues to progress through a savings drive in the wake of the coronavirus pandemic.
Jon Lewis, Capita’s Chief Executive Officer, noted, “We are pleased to have agreed the sale of our Secure Solutions and Services (SSS) business to NEC Software Solutions UK following a competitive sale process. We announced our intention to sell SSS earlier this year as part of our ongoing strategy to simplify and strengthen Capita. The disposal is another step towards a more focused and sustainable business for the long term.”
SSS is a provider of software solutions and managed services to the emergency services and justice sectors. Capita’s SSS colleagues and clients will now join NEC, with plans to take the business onto the next stage of its development. This includes the senior management team.
The revenue of the SSS business for the year to the end of December 2020 was £72 million, while it recorded a profit before tax of £10 million respectively. Its gross assets were valued £63 million as of June 2021. These figures also include a Radio Managed Service contract that is included in the sale and which is due to terminate at the end of 2022. As a result, the consideration for the deal is expected to be £62 million, on a cash free debt free basis. The sale is still subject to relevant approvals including customers and regulators.
The move marks NEC Software Solutions’ seventh acquisition since being acquired by NEC. DC Advisory advised the firm’s UK wing on its acquisition of Capita Secure Solutions and Services from Capita.
Tina Whitley, CEO of NEC Software Solutions UK said, “Capita Secure Solutions and Services is a natural fit with NEC. Emergency services face extreme challenges and pressures when deploying resources. Our goal has always been to provide emergency services with innovative tools to be able to better protect the communities they serve. By bringing our teams together, we create an enhanced platform to ensure we continue to do this as we innovate and grow.”
Earlier this year, Capita announced its intention to sell a number of non-core businesses which will be used to strengthen the balance sheet and address upcoming maturities. Following the sale of its legal systems division in 2020, Capita also confirmed the sale of its Education Software Solutions business before the start of 2021.
Three quarters later, a release from Capita said it continues to “make good progress towards its target of £700 million of proceeds from disposals in 2021 and the first half of 2022.” Adding the expected proceeds from the disposal of SSS to the amount that Capita has already raised would bring the total proceeds to circa £600 million.
