Capita has entered into a significant transaction by selling its private sector call center business to Inspirit Capital. This move is strategic, aimed at refocusing efforts on the public sector and pensions.
Transaction Overview
The sale price is set at a nominal £1, with £6.5 million retained in the business for working capital. Additionally, Capita could receive up to £61.5 million in contingent payments based on the future financial performance of the disposed business. These payments are anticipated to occur in 2027 and 2028.
Financial Highlights
- Sale price: £1
- Cash retained: £6.5 million
- Potential contingent consideration: Up to £61.5 million
- 2025 adjusted revenue from the business: £398.1 million
- 2025 adjusted operating loss: £34.9 million
- Total net lease benefit: £26.2 million
Capita expects to enhance its adjusted operating margin by approximately 200 basis points by 2027. This improvement is outlined against the 2025 adjusted operating margin of 5.2%. Furthermore, the company anticipates achieving annualized savings of around £40 million through simplification initiatives in 2026 and 2027, with transitional restructuring costs expected to be about £20 million.
Strategic Focus on Public Sector and Pensions
With the completion of this transaction, Capita aims to eliminate complexities within the Group, allowing for better operational efficiency. Notably, the Group will retain only three underutilized properties, which are expected to yield significant cost savings moving forward. This aligns with Capita’s goal of becoming a leading AI-driven business processing outsourcer.
Future Plans
Capita has scheduled an investor update for June 17, 2026. This meeting will detail future market opportunities, refreshed financial targets, and plans for capital allocation post-transaction.
The sale, pending regulatory approval, will complete before Capita’s half-year results are announced in August. This strategic maneuver reflects Capita’s commitment to improving financial performance and focusing on core sectors of public service and pensions.
