Capita plc (‘Capita’) today announces that it has agreed to sell its 75% stake in Fera Science Limited (‘Fera’) to Bridgepoint Group plc (‘Bridgepoint’), for an enterprise value of £60m on a cash-free, debt-free basis. The deal values the total joint venture at £80m and represents a 10.8x multiple on a 2022 standalone EBITDA of £7.4m¹.
The sale of Capita’s 75% interest in Fera, a joint venture with the Department for Environment, Food & Rural Affairs (Defra), will result in Capita receiving cash proceeds of £62m upon completion. These cash proceeds include cash and debt-like items and working capital adjustments.
This will provide additional liquidity to further strengthen Capita’s balance sheet and support investment across the Group.
Fera was established in 2015 as a joint venture between Capita (75%) and Defra (25%) to create a financially sustainable business, focused on the agriculture, farming and food production market. It specialises in environmental testing, research, and advisory and assurance services for both the public and private sectors.
Capita consolidates Fera in its consolidated financial statements. The reported revenue and profit before tax for the year to 31 December 2022 were £45m and £3m respectively. Gross assets were £37m at 30 June 2023.
National Security and Investment Act clearance has been secured as a condition to enable completion to take place. As a condition precedent to completion, changes being made to the title of the property from which Fera operates require consent from the superior landlord. This consent process has commenced. As part of the transaction, Defra is retaining its shareholding.
All current Fera senior management and employees will remain with the business when Bridgepoint becomes the new majority shareholder on completion.
The sale of Fera and of our travel businesses, which completed on 14 November, marks the successful end of non-core disposals from Capita’s Portfolio division as part of a strategy to simplify and strengthen the business around two core markets.
Jon Lewis, Capita’s Chief Executive Officer, said: “We are very pleased to have agreed the sale of our stake in Fera after a competitive auction process.
“Capita and Defra have partnered together to grow and professionalise Fera over the past eight years, creating significant value for us and the taxpayer.
“Fera is now a vibrant and profitable commercial business, successfully serving private sector and government customers in both the UK and overseas.
“We had previously announced our intention to sell our stake in Fera, as part of our ongoing strategy to simplify and strengthen Capita. It was the appropriate time to find a new partner to build on the strong, successful foundations now in place at Fera and take the company onto the next stage of its development.
“This is the latest excellent example of Capita successfully collaborating with the UK Government to commercialise and transform Government assets into valuable businesses, following previous successes including Constructionline and AXELOS.
“I am particularly delighted that, subject to successful completion of this transaction and our travel businesses, which completed on 14 November, we will have completed our non-core disposals programme. These disposals have enabled us to significantly strengthen the balance sheet and materially reduce our debt.”
Capita is being advised on the transaction by Strata Partners.
¹Standalone EBITDA has been derived by adjusting the 2022 EBITDA of the joint venture by adding back the management charge from Capita and deducting an estimation of the costs to run the entity once it is no longer part of the Capita group.
For more information, please contact:
Director of Investor Relations
Investor Relations Manager
Capita external communications
Tel: 0207 654 2399
About Capita plc
Capita is a leading provider of business process services, driven by data, technology and people. Every day our 43,000 colleagues help millions of people, by delivering innovative, digitally enabled solutions to transform and simplify the connections between government and citizens, businesses and customers. We partner with our clients and provide the insight and technologies that give time back, allowing them to focus on what they do best and making people’s lives easier and simpler. We operate across two divisions – Capita Public Service and Capita Experience – in the UK, Europe, India and South Africa.
Fera is a national and international centre of excellence for interdisciplinary investigation and problem solving across plant and bee health, crop protection, sustainable agriculture, food and feed quality and chemical safety in the environment. Fera creates and delivers integrated, innovative and expert research services and products for our clients and partners in crop protection, chemical and animal health, as well as food producers and growers, manufacturers, distributors and retailers. Fera supports and works closely with governments, commercial entities, academia and other leading research organisations.
About Bridgepoint Group plc
Bridgepoint Group plc is a listed international alternative asset manager focused on middle-market companies typically valued up to €1 billion. With €39.5 billion of assets under management, the company has c.200 investment professionals (covering Services, Advanced Industrials, Healthcare and Consumer with Technology as a horizontal sector) in Europe, the US and China. Bridgepoint has four distinct investment strategies: Private Equity (Mid-cap, Small mid-cap, and Growth) and Private Credit.