Capita sells off 5 software businesses to AdvancedAdvT for £33m

The sale is part of the vendor's ongoing divestment plan

Professional services giant Capita has sold a further five software businesses as part of its divestment strategy which kicked off towards the end of 2022.

The businesses were sold for an approximate combined enterprise value of £33m in cash to AdvancedAdvT.

The sale is part of a continued divestment journey Capita has been on for the last year. Earlier in March, the company sold off its screening solution provider Security Watchdog to workforce technology and services business, Matrix, to "strengthen the balance sheet".

Then in September 2022, it sold Pay360 to Access PaySuite to "simplify and strengthen".

Financial and business solutions, CIBS, CHKS, Synaptic, Retain/WFM were among the businesses sold off.

In the year ended 31 December 2022, these businesses generated a total revenue of approximately £35m, with approximately 74 per cent of the revenue being recurring or from SaaS.

AdvancedAdvT claimed that in addition to organic growth, the acquisitions will create a platform to develop the company by exploring growth opportunities in synergistic sectors and by targeted investment and M&A activities.

The transaction will be funded by the company's cash reserves.

"We are delighted to start our next journey with the great teams from across these businesses and look forward to working with them," said Vin Murria, chairperson at AdvancedAdvT.

"As has been our model in previous vehicles, ADVT will support the teams in delivering strong new organic growth - both in existing sectors as well as new areas including data, analytics, managed service and digital transformation opportunities.

"Equally, we are excited to drive new opportunities and with a substantial war chest, the business is well placed to execute M&A that is both synergistic and accretive over the longer term."

Share suspension

AdvancedAdvT, however, also cautioned that there can be no certainty yet that the acquisitions will take place.

If completed, the acquisitions, would constitute a reverse takeover under the listing rules and accordingly the company would need to apply for re-admission of its shares to the official list.

In the meantime, at the request of AdvancedAdvT the financial conduct authority has suspended the company's listing in its shares on the standard segment of the official list and trading from the London Stock Exchange with immediate effect, pending the publication of a prospectus providing further detail on CIBS, CHKS, Synaptic and Retain/WFM and the company as enlarged by the acquisitions.

In the event the acquisitions do not proceed the company will seek the lifting of its suspension from the standard segment of the official list and trading on the LSE.