Capita confirms sale of real estate consulting wing

Capita has agreed to sell its real estate and infrastructure consultancy businesses to WSP. As the professional services firm continues to reorient its group, it will complete the sale for £60 million on a cash-free, debt-free basis.

Capita Real Estate and Infrastructure (REI) is a leading UK-based provider of specialist advisory, design, engineering, environmental and project management services for land, building and infrastructure owners. Meanwhile, GL Hearn (GLH) is a leading real estate business, providing cross-sector advice to developers, investors and occupiers with a strong market reputation across key service areas, including planning and development, rating, valuation and occupier services.

WSP is a Canadian company with American and British roots, providing management and consultancy services to the built and natural environment. In line with WSP’s strategic ambitions, the acquisition will boost its expertise in core markets, including transport, building, and environment. As it looks to grow its footprint in the UK, the deal for REI and GLH will add around 1,000 UK-based employees to WSP’s workforce, reinforcing its existing service offering within the country and expanding its strategic advisory offering.

“We are pleased with the opportunity to have both Capita REI and GLH join WSP. We view our market sector strengths as highly complementary and conducive to augmenting our value proposition while accelerating the growth potential of our UK business,” said Alexandre L’Heureux, WSP’s President and Chief Executive Officer.

The reported revenue and profit before tax of the two businesses combined for its last financial year were £88.6 million and £5.1 million respectively. Meanwhile, its combined gross assets were £124.2 million at the end of 2021. As it sought to offload the two businesses, Capita was advised on the REI and GLH transaction by Deloitte Corporate Finance.

The senior management teams and employees of REI and GLH will remain with their businesses as they transfer to the ownership of WSP. Dave Spencer, Managing Director within Capita’s REI team, suggested it would benefit both the REI and GLH businesses to provide better client support whilst growing their collective market share via the tremendous expertise of its combined teams with WSP.

He added, “Being part of one of the world’s leading property and infrastructure services firms will give us access to a greater range and scale of projects, as well as to new career opportunities for our people, and all those with ambitions to join us.”

The move comes as a previously announced non-core disposal programme continues in earnest at Capita. As the firm sought to strengthen its balance sheet amid the pandemic, and focus on its two core divisions, Capita Public Service and Capita Experience, it agreed to offload a number of other practices. In the last 12 months, this saw four other sales processes: Secure Solutions and Services, AMT Sybex, its two specialty insurance businesses, and Trustmarque.

With the deal for REI and GLH, total proceeds from the non-core disposal programme will be more than £800 million. Capita CEO Jon Lewis suggested this would not be the last such sale, either, noting the firm will “continue to execute on our plan at Capita to materially reduce debt through the disposal of non-core businesses.”

Lewis went on, “We are pleased to have agreed the sale of these two businesses to WSP following a competitive sale process. Our REI and GLH colleagues and clients will join an established industry organisation with plans to take the businesses onto the next stage of their development… It marks another significant step, as we continue to simplify and strengthen Capita, and become a more successful business for the long term.”