1st Apr 2014 09:57
LONDON (Alliance News) - Support services company Capita PLC Tuesday said it has acquired IT network services provider Updata Infrastructure (UK) Ltd for GBP80 million in cash on a cash free, debt free basis, a move that will bolster Capita's IT services division with a business it already works closely with.
Reigate-based Updata provides a range of networking and connectivity services to mainly public sector clients. It is forecasting an operating profit of GBP5.6 million on revenues of GBP41.8 million in its financial year to June 30. In calendar 2015, Capita expects Updata to generate operating profits of about GBP12 million on revenues of about GBP74 million.
Capita and Updata have had a strategic alliance in Scotland since October 2011, working together on contracts for local authorities in West Dunbartonshire, North Ayrshire, Fife and East Lothian. The two companies recently started working together on a framework contract to deliver the Scottish Wide Area Network, a single public services network for the use of all public service organisations within Scotland.
"Updata has a strong reputation across the public sector as a provider of IT networks that help schools, councils and health bodies deliver improved services. As part of Capita, Updata will
strengthen our network capability and ensure we continue to meet the needs of our clients across the UK," Capita Chief Executive Andy Parker said in a statement.
In a separate statement, LMS Capital said it had sold its interest in Updata for GBP27.2 million in net proceeds, representing a 5.3 times return on cash invested and an internal rate of return of 52% since LMS Capital acquired the stake in 2009.
LMS Capital said that in isolation, the disposal increases its net asset value per share by 5%, or 4 pence, compared with December 31, 2013.
"This sale demonstrates continued progress with the realisation strategy, and it is the directors' current intention to make a further distribution to shareholders later in the year," LMS Chairman Martin Knight said.
Capita shares were up 0.3% at 1,099.00 pence Tuesday morning. LMS Capital shares were up nearly 3% at 78.50 pence.
By Steve McGrath; [email protected]; @stevemcgrath1
Copyright 2014 Alliance News Limited. All Rights Reserved.
Related Shares:
Lms CapitalCAP.L