avocis to be acquired by Capita

3 February 2015 European contact centre specialists, avocis, to be acquired by Capita Capita has agreed to acquire avocis, a leading provider of customer contactmanagement services in Germany, Switzerland and Austria (DACH), for €210m (£157m) on a cash/debt free basis, subject to approval by the German competitionauthority, Bundeskartellamt. avocis has a strong position in the Germanspeaking regions of Europe serving similar sectors to Capita's UK-basedcustomer management business, with high quality, long term clients particularlyin telecoms and utilities. avocis is currently under private equity majority ownership. In the financialyear ended 31 December 2014, avocis had pro forma revenues of €210m (2013: €173m) EBITDA of €29.8m (2013: €23.3m) and EBITA of €25.4m (2013: €19.7m).Germany accounts for 53 per cent of its revenue, where it isthe third largest customer management services provider by sales, with themajority of the remainder generated in Switzerland, where it is market leader.avocis is expected to achieve Capita's post-tax ROCE target[1] in its secondfull year under ownership. Acquisitions, alongside generating profitable organic growth, are a key part ofCapita's business model to both build its capabilities and increase its marketreach and penetration across a growing number of sectors. Capita now operatesacross 11 diverse market sectors in the growing UK business process andcustomer management market. The acquisition of avocis enables Capita tosimilarly build scale in the DACH region, delivering services that it knowswell and creating an additional growth platform for Capita's wider services inthis large and growing market. The DACH region has 110m German speakers and, with Germany the largest economyin Europe, offers an excellent opportunity for growth. The region has anestablished business process outsourcing and customer management market but itis currently more fragmented and less penetrated than the UK, providingsignificant opportunity for a transformational outsourcing partner. The Germanoutsourced customer and business process management market in 2014 wasestimated to be worth €19.5bn and is expected to grow at 6 per cent annually to2018[2]. Capita entered the German market in June 2014, with the acquisition oftricontes, a niche customer management business. In January 2015 it acquiredDortmund based Scholand and Beiling, which provides customer managementconsultancy services and has extensive relationships across the sector. Thecombined acquisitions, allied to UK expertise gained in the relevant markets,places Capita in a unique position to develop opportunities in the DACH region. Capita chief executive, Andy Parker, said: "We are excited by the opportunitiesin the DACH region. The acquisition of avocis provides us with immediate scaleand further capabilities in this territory. avocis has a strong position in theGerman speaking regions of Europe with long term and growing relationships withquality private sector clients. We will be able to offer these clients accessto Capita's wider transformation capabilities and services and establish astrong platform for developing relationships with new clients in the region. Weare already in discussions with a number of our existing UK clients who haveEuropean parents and subsidiaries, regarding the potential to extend currentcontracts and agree new ones in this region." The combined operations in the DACH region will form a new division and willinitially be led by Vic Gysin, Joint Chief Operating Officer, alongside hisexisting duties. Vic will work closely with the existing strong managementteams to bring these businesses together and connect with the wider Capitacapabilities. -ends- Analyst & investor conference call: Andy Parker, Chief Executive of Capita plc, will host an analyst and investor call in Londonat 8.00am UK time today. Please dial into the call in time to allow forregistration. Dial-in number: +44 (0) 20 3139 4830 or freephone 0808 237 0030. Participant PIN Code: 39839856# A replay of the conference call will be available for 7 days by dialling +44(0) 20 3426 2807 or freephone 0808 237 0026 (access code is 654200#) For further information: Capita plc Tel: 020 7799 1525 Andy Parker, Chief Executive Officer Shona Nichols, Communications Executive Director Andrew Ripper, Head of Investor Relations Media enquiries only: Capita press office Caroline Mooney Tel: 020 7654 2152 or 020 7654 2399 (out of hours) Email: [email protected] Note to editors Capita plc is the UK's leading provider of BPO and integrated professionalsupport service solutions. With 66,000 people at over 400 sites, including 73business centres across the UK, Europe, India and South Africa, the Group usesits expertise, infrastructure and scale benefits to transform its clients'services, driving down costs and adding value. Capita is quoted on the LondonStock Exchange (CPI.L), and is a constituent of the FTSE 100 with 2013 revenueof £3.9 billion. Further information on Capita plc can be found at:www.capita.co.uk 1. Capita's target post tax return on capital invested in acquisitions is 15%. 2. Source: NelsonHall