#business Private equity eyes Capita's card payments firm Pay360

#business Private equity eyes Capita’s card payments firm Pay360

#enterprise Private fairness eyes Capita’s card funds agency Pay360

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Private fairness corporations circling fee providers enterprise put up on the market by Capita, certainly one of Government’s greatest contractors

Private fairness corporations are circling the fee providers enterprise put up on the market by Capita, one of many Government’s greatest contractors. 

Capita’s Pay360 arm has been placed on the block as a part of a programme to dump non-core operations. 

The sale has been below approach for a number of weeks and is known to be in its second spherical. 

Sale: Capita's Pay360 arm has been put on the block as part of a programme to offload non-core operations

Sale: Capita’s Pay360 arm has been placed on the block as a part of a programme to dump non-core operations

The asking value is north of £200million, which is near half of Capita’s inventory market valuation of £433million, sources mentioned. 

Shares in Capita are down a 3rd this yr regardless of efforts taken by the corporate to strengthen its steadiness sheet by promoting smaller companies and streamlining operations. 

The firm, which collects the BBC licence price and handles London’s congestion cost, lately reported a plunge in half-year income to simply £100,000 from £261million a yr earlier, blaming ‘weaker-than-expected returns’ from a few of the gross sales and a £92.5million goodwill write-off. 

Pay360 processes funds for public sector organisations together with native councils and faculties, and handles greater than 255million card transactions value £11billion for corporations together with WHSmith and mutual insurer Royal London. 

Sources mentioned it’s forecasting round £12million of income earlier than curiosity, tax and distinctive prices this yr and £15million subsequent. 

Bidders are understood to incorporate non-public fairness gamers and personal equity-backed UK software program corporations. Capita, suggested by Barclays, has set a deadline for bids of early to mid-September. 

Potential patrons could also be eyeing a value decrease than £200million, partly as a result of Pay360’s publicity to authorities contracts, which account for round half of its income, one supply mentioned. 

However, the enterprise is seen as ‘sturdy’ and recession-proof. 

Capita bought off 4 companies within the first half of this yr, together with Trustmarque for £118million in May. It additionally bought AMT Sybex and Speciality Insurance. 

In its half-year outcomes, Capita mentioned three disposal processes have been ‘in progress’, together with Pay360. 

The firm has made £223million from disposals up to now this yr, taking complete proceeds from the disposal programme to greater than £750million. Cash from disposals has helped it scale back its debt mountain to £710million, from £880million on the finish of December. 

Capita and Barclays declined to remark.


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