Constructionline to be acquired by Capita

28 January 2015 Constructionline to be acquired by Capita The Department for Business, Innovation and Skills (BIS) has announced,following the completion of a competitive sales process, that Capita plc(`Capita') is the successful bidder to acquire the assets of Constructionlinefor £35m on a cash free, debt free basis. Constructionline is one of the UK's largest procurement and supply chainmanagement services and was set up by BIS (formerly the Department of theEnvironment, Transport and the Regions) initially for public sector contracts.It aims to reduce the annual cost (currently £165m) for construction industrybuyers and suppliers, particularly SMEs, of repeatedly providing pre tenderinformation. Capita was awarded the original concession to runConstructionline, by the Government, in 1998 and was successful in thesubsequent re-tenders. As the new owner Capita will be able to further invest and commercialiseConstructionline, delivering enhanced services to both the private and publicsectors. Capita will extend the range of value added procurement services itoffers contractors and suppliers. Initially focusing on construction, it willalso develop similar services for other industries. To support this expansionCapita will invest in a new IT system which will make the business moreeffective and agile and improve efficiency, bringing more automation to theapplication process. Andy Parker, Capita chief executive, said: "Capita has run Constructionlinesuccessfully for more than 16 years, building one of the largest buyer andsupplier service organisations of its kind, helping buyers achieve complianceand returning regular income to BIS and the tax payer. But under public sectorownership, there have, understandably, been a number of constraints to theservice reaching its full potential. "In spite of its success to date, Constructionline currently provides itsservices to less than 15 per cent of the addressable suppliers in theconstruction industry, a market estimated to be worth more than £30m annually.We believe that we can accelerate our penetration of both this and new marketsectors and with a broader and more value added service we will be able to growConstructionline rapidly. We therefore expect to increase revenues by 40 percent over the next two years and achieve the company's acquisitions targetreturn on invested capital1." Constructionline's revenue was £9.3m and pro forma operating profit £4.1m in the year toDecember 2014. For further information: Capita plcTel: 020 7799 1525Andy Parker, Chief Executive OfficerShona Nichols, Corporate Communications Director Media enquiries only:Capita press officeCaroline MooneyTel: 020 7654 2152 or 020 7654 2399 (out of hours)Email: [email protected] Notes to editors 1. Capita's target post tax return on capital invested in acquisitions is 15% after 12 months integration within the group. 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