14th Dec 2020 12:20
(Alliance News) - Capita PLC on Monday said it has agreed to sell its Education Software Solutions business to Tiger UK Bidco Ltd for a price of up to GBP400 million.
Tiger UK Bidco is a new company established by funds advised by Montagu Private Equity LLP, the private equity firm with headquarters in London.
The London-based consulting, transformation and digital services business's ESS provides management information system software to the education sector. The gross assets of ESS and the reported pretax profit for the year ended December 31, 2019 were GBP96.2 million and GBP52.7 million respectively.
Capita said part of the agreement will see Montagu assume liabilities such as a working capital and debt worth GBP57 million. Montagu will pay GBP298 million once the sale is completes, which is expected in early 2021.
The company said GBP50 million from the transaction proceeds will be used to replace the remaining value of an asset-backed financing agreement, relating to intellectual property developed by ESS, which was entered into in 2012 with the Capita pension scheme.
Montagu said it has agreed to invest in ParentPay Holdings Ltd, a provider of education technology based in London. Following the successful completion of both investments, ESS will become part of the ParentPay Group, and an additional GBP45 million will be payable to Capita once the investment in ParentPay has achieved regulatory approvals.
Chief Executive Jon Lewis said: "The sale will help us simplify by disposing of a standalone business, while the proceeds will help strengthen Capita’s balance sheet, as we build towards a more focused, sustainable business for the long term."
Shares in Capita were up 4.5% at 47.42 pence in London on Monday.
By Zoe Wickens; [email protected]
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