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Sat July 21 2018

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Capita quids in with £160m Constructionline sale

19 Jun Capita has sold Construction line to private equity investors for more than four times what it paid the government for it just three years ago – and 27 times earnings.

Capita has reached an agreement to sell its Supplier Assessment Services division, which holds Constructionline, to funds affiliated with Warburg Pincus for £160m cash.

Constructionline was set up by the UK government in 1998 to provide a single point of reference for all pre-qualification data for the construction industry. It was initially administered by Capita on behalf of the government. Capita then paid £35m for Constructionline in January 2015 when the government decided to privatise it, and made it the basis of a division called Supplier Assessment Services. This division generated revenue of £14m in 2017 and made an operating profit of £6m. Gross assets are shown as £26m.

Capita said that it had substantially grown the business by invested in it and commercialising it. New services added by Capita include an insurance service and a health & safety consultancy operation.

Capita decided to offload Constructionline as part of a programme to reduce debt by disposing of non-core assets. The sale is expected to complete in early July 2018.

Capita chief executive Jon Lewis said: “This transaction marks a further step in executing the strategy announced in April aimed at simplifying and strengthening the business to deliver future success and contributing to realising £300m from non-core disposals in 2018.”

 

 

 

 

 

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