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Wed September 18 2019

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Capita quids in with £160m Constructionline sale

19 Jun 18 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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