Capita has announced the sale of the Capita Asset Services businesses (CAS) to Australian IT services management company Link Administration Holdings for a cash-free, debt-free consideration of £888 million.
The transaction is subject to regulatory and other approvals and is expected to be completed in the fourth quarter of this year.
On completion of the sale, after the deduction of transaction expenses of approximately £72 million, the net cash proceeds are intended to be used to reduce indebtedness, including the company’s receivables financing facility.
The group issued a series of profit warnings towards the end of last year.
Including the proceeds and excluding the EBITDA generated by CAS, the pro forma net debt/EBITDA ratio would have been 1.8 times at 31 December 2016.
Andy Parker, Chief Executive of Capita said: “In autumn last year we set out a strategy to simplify and streamline Capita by refocusing on delivering technology-enabled business and customer management solutions. This disposal is an important step in realising this strategy."
Asked how the sale would affect Capita's operations in Jersey, the firm said: "It’s business as usual in Jersey. The business will continue to be run by Anthony O’Keeffe and his management team."