REG-Capita Plc: Capita agrees to sell stake in Fera and completes non-core disposal programme

CapitaAnnouncement

04/12/2023 07:15

 

 

4 December 2023

Capita agrees to sell stake in Fera and completes non-core disposal programme

Capita plc (‘Capita’) today announces that it has agreed to sell its 75%
stake in Fera Science Limited (‘Fera’) to Bridgepoint Group plc
(‘Bridgepoint’), for an enterprise value of £60m on a cash-free,
debt-free basis. The deal values the total joint venture at £80m and
represents a 10.8x multiple on a 2022 standalone EBITDA of £7.4m1.

 

The sale of Capita’s 75% interest in Fera, a joint venture with the
Department for Environment, Food & Rural Affairs (Defra), will result in
Capita receiving cash proceeds of £62m upon completion. These cash proceeds
include cash and debt-like items and working capital adjustments.

This will provide additional liquidity to further strengthen Capita’s
balance sheet and support investment across the Group.

Fera was established in 2015 as a joint venture between Capita (75%) and Defra
(25%) to create a financially sustainable business, focused on the
agriculture, farming and food production market. It specialises in
environmental testing, research, and advisory and assurance services for both
the public and private sectors. 

Capita consolidates Fera in its consolidated financial statements. The
reported revenue and profit before tax for the year to 31 December 2022 were
£45m and £3m respectively. Gross assets were £37m at 30 June 2023.

National Security and Investment Act clearance has been secured as a condition
to enable completion to take place. As a condition precedent to completion,
changes being made to the title of the property from which Fera operates
require consent from the superior landlord. This consent process has
commenced. As part of the transaction, Defra is retaining its shareholding.

All current Fera senior management and employees will remain with the business
when Bridgepoint becomes the new majority shareholder on completion.

The sale of Fera and of our travel businesses, which completed on 14 November,
marks the successful end of non-core disposals from Capita’s Portfolio
division as part of a strategy to simplify and strengthen the business around
two core markets.

 

Jon Lewis, Capita’s Chief Executive Officer, said: “We are very pleased
to have agreed the sale of our stake in Fera after a competitive auction
process.

“Capita and Defra have partnered together to grow and professionalise Fera
over the past eight years, creating significant value for us and the taxpayer.

“Fera is now a vibrant and profitable commercial business, successfully
serving private sector and government customers in both the UK and overseas.

“We had previously announced our intention to sell our stake in Fera, as
part of our ongoing strategy to simplify and strengthen Capita. It was the
appropriate time to find a new partner to build on the strong, successful
foundations now in place at Fera and take the company onto the next stage of
its development.

“This is the latest excellent example of Capita successfully collaborating
with the UK Government to commercialise and transform Government assets into
valuable businesses, following previous successes including Constructionline
and AXELOS.

“I am particularly delighted that, subject to successful completion of this
transaction and our travel businesses, which completed on 14 November, we will
have completed our non-core disposals programme. These disposals have enabled
us to significantly strengthen the balance sheet and materially reduce our
debt.”

Capita is being advised on the transaction by Strata Partners.

1Standalone EBITDA has been derived by adjusting the 2022 EBITDA of the joint
venture by adding back the management charge from Capita and deducting an
estimation of the costs to run the entity once it is no longer part of the
Capita group.

 

For more information, please contact: 

 

Investor enquiries   

Helen Parris                             
Stephanie Little 

Director of Investor Relations     Investor Relations Manager 

Tel: 07720 169269                    Tel: 07541 622838 

Email: IRteam@capita.co.uk      Email: IRteam@capita.co.uk   

 

Media enquiries 
Capita external communications 
Tel: 0207 654 2399 
Email: media@capita.co.uk  

 

 

About Capita plc

 

Capita is a leading provider of business process services, driven by data,
technology and people. Every day our 43,000 colleagues help millions of
people, by delivering innovative, digitally enabled solutions to transform and
simplify the connections between government and citizens, businesses and
customers. We partner with our clients and provide the insight and
technologies that give time back, allowing them to focus on what they do best
and making people’s lives easier and simpler. We operate across two
divisions – Capita Public Service and Capita Experience – in the UK,
Europe, India and South Africa.
 

About Fera

Fera is a national and international centre of excellence for
interdisciplinary investigation and problem solving across plant and bee
health, crop protection, sustainable agriculture, food and feed quality and
chemical safety in the environment. Fera creates and delivers integrated,
innovative and expert research services and products for our clients and
partners in crop protection, chemical and animal health, as well as food
producers and growers, manufacturers, distributors and retailers. Fera
supports and works closely with governments, commercial entities, academia and
other leading research organisations.

 

About Bridgepoint Group plc

Bridgepoint Group plc is a listed international alternative asset manager
focused on middle-market companies typically valued up to €1 billion. With
€39.5 billion of assets under management, the company has c.200 investment
professionals (covering Services, Advanced Industrials, Healthcare and
Consumer with Technology as a horizontal sector) in Europe, the US and China.
Bridgepoint has four distinct investment strategies: Private Equity (Mid-cap,
Small mid-cap, and Growth) and Private Credit.

 



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