Capita sells software business to MRI Software for £200m

Capita is aiming to streamline operations and reduce debt with this move

UK-based Capita has sold its standalone software business, Capita One, to MRI Software in a deal valued at £200m.

The transaction, which represents approximately 10 times Capita One's 2023 EBITDA of £21m, is expected to complete towards the end of August 2024, subject to shareholder approval and regulatory clearance.

Capita One, which provides software solutions for local authorities, education authorities, and housing associations, generated revenue of £55m and profit before tax of £19m in 2023.

The business helps public sector organisations improve efficiency, maximise revenue collection, and deliver cost-effective essential services.

Adolfo Hernandez, Capita's CEO, said: "Capita One is a high-quality business that has performed exceptionally well. Under its new owner, it is well positioned to benefit from investment in its strategic growth."

He added the sale aligns with Capita's strategy to become more focused, prioritising businesses with material future opportunities.

The divestment is part of Capita's plan to streamline its operations and reduce debt.

The company expects to receive gross cash proceeds of approximately £207m upon completion, in addition to a pre-completion cash dividend of £4.8m from Capita One.

Real estate software solutions provider MRI Software said it intends to support Capita One's growth plans and further develop its product portfolio and customer base.

The acquisition is expected to strengthen MRI Software's position in the public sector software market.

Barclays Bank PLC is acting as the sole financial advisor and sponsor to Capita on this transaction.