Capita sells IT services unit for £111 million
Embattled outsourcing firm says it has now reached its divestment target of £700 million
Outsourcing specialist Capita is to sell its IT services and solutions company, Trustmarque, to private-equity firm One Equity Partners for £111 million.
The deal is part of Capita's recovery plans as it looks to switch focus to core parts of its business.
Trustmarque, which Capita brought for just £57 million in 2016, accounted for around 4% of Capita's total revenue, according to its 2020 fiscal reports, but the firm is more concerned with investing in its Capita Public Services and its Capita Experience.
Its public-focused services include contracts with the UK government, such as the collection of BBC licence fees, but also a number of controversial contracts and 'botched' digital transformation projects.
The firm reported annual losses of almost £50 million in 2020, prompting plans to halve the number of business divisions from six to three in a bid to raise £700 million pounds. This included the sale of its software business, AMT Sybex, and its Secure Solutions security services.
With Trustmarque now being offloaded, the company said it has already reached the £700 million divestment target, which was initially set for June 2022.
The pandemic and remote working have also provided the outsourcing firm with cost-saving opportunities. With many of its 55,000 employees taking up working from home, the firm has managed to reduce its office footprint by 11%, which includes the closure of its London headquarters.
"We are now focused on selling the remaining businesses in our portfolio division, with the goal of disposing of the majority by the end of 2022," CEO Jon Lewis said in a statement.
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It's not clear how much Trustmarque - which offers IT transformation services - was involved in Capita's most public failures. In 2012, the company was awarded a contract with the British armed forces for recruitment, a project that ultimately led to "several" failings, including mass delays to an online recruitment tool. The British Army failed to hit its recruitment targets for every year of the contract as a result.
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