Capita edges towards sale of education software arm

Capita is edging towards the sale of its education software business.

In a note to the London Stock Exchange, the outsourcing firm confirmed it was in "exclusive talks" with private equity house Montagu over the potential sale of its Education Software Solutions (ESS), but said a deal is yet to be completed.

"There can be no certainty that a sale will be concluded nor any certainty over the terms of any such sale," the note stated. "Any further announcement will be made if and when appropriate."

Capita has been seeking a buyer for ESS for several months now to help its balance sheet, after the successful sale of Eclipse Legal Systems to Access UK for £56.5m earlier this year. It also sold Capita Workplace Technology back to its founder Paul Gillett through an MBO earlier this year.

The firm recently reported a mixed third quarter for results with revenues tumbling but considerable gains in its EBITDA and operating profits and reiterated its intention to sell ESS.

Capita's share price has tanked by as much as 80 per cent this year, predominately as a result of wretched full-year earnings published in March.