Capita : Agreement to sell stake in AXELOS

Capita plc ('Capita') today announces that Capita and Cabinet Office have agreed to sell AXELOS Limited ('AXELOS') to PeopleCert International Limited ('PeopleCert') in a deal that values the joint venture at £380.0m on a cash-free, debt-free basis, representing an 11.5x multiple on 2020 EBITDA of £33.1m.

The sale of Capita's 51% interest in AXELOS will result in Capita receiving net cash proceeds of £172.5m upon completion. Prior to completion, Capita will also receive a cash dividend of £11.1m making total net cash receipts of £183.6m. This will provide additional liquidity to strengthen Capita's balance sheet, meet upcoming debt maturities and support the ongoing implementation of its transformation plan.

As part of the PeopleCert investment in AXELOS, FTV Capital Management will become a minority shareholder in PeopleCert. The sale of Capita's 51% interest in AXELOS is a Class 1 transaction and the transaction is conditional on: the approval of Capita's shareholders, with a circular to be posted in due course, including a timetable for a General Meeting of Capita shareholders; consents and/or waivers from certain creditors of Capita; and clearance by the Cyprus Commission for the Protection of Competition.

These conditions are currently expected to be satisfied in July. AXELOS was established as a joint venture between Capita (51%) and Cabinet Office (49%) in 2013. It is responsible for developing, enhancing and promoting a number of best practice methodologies primarily in project, programme and portfolio management, and IT and digitally enabled services, including PRINCE2 and ITIL.

The sale of AXELOS follows a strategic review of the joint venture by Capita and Cabinet Office and comes as Capita moves into the next phase of its transformation. As Capita holds a 51% interest in AXELOS, it is included in the Capita Group's consolidated accounts.

The gross assets of AXELOS at, and the profit before tax for the year to, 31 December 2020, were £115.7m and £24.3m respectively. The AXELOS senior management team will be transferring with the business. Capita continues to make good progress with its planned disposals, and remains on track to realise combined proceeds of at least £200m this year (in addition to the £299m initial payment received from the sale of ESS in February).

Jon Lewis, Capita's Chief Executive Officer, said: 'We are very pleased to have agreed, alongside Cabinet Office, the sale of our joint venture AXELOS to PeopleCert after a competitive auction process. 'Capita and Cabinet Office have partnered together to grow the business over the last eight years, creating significant value for us and the taxpayer.

'AXELOS is an excellent example of a successful collaboration between the private sector and the UK Government.' He added: 'We announced our intention to sell our stake in AXELOS earlier this year, as part of our ongoing strategy to simplify and strengthen Capita.' 'The sale will help us simplify Capita by disposing of a non-core business, while the proceeds will help strengthen Capita's balance sheet, as we build towards a more focused, sustainable business for the long term.'

Barclays Bank PLC, acting through its Investment Bank ('Barclays') is acting as sole financial advisor to AXELOS. Goldman Sachs International is acting as sponsor to Capita.

For more information, please contact:

Investor enquiries: Stuart Morgan, Director of Investor Relations
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Media enquiries

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About AXELOS

AXELOS is a joint venture between Capita (51%) and Cabinet Office (49%), responsible for developing, enhancing and promoting a number of best practice methodologies used by professionals working primarily in project, programme and portfolio management, and IT and digitally enabled services. The methodologies, including ITIL, PRINCE2 and MSP are adopted by private, public and voluntary sectors in more than 180 countries to improve employees' skills, knowledge and competence in order to make both individuals and organisations work more effectively. Professionals at 90% of the world's leading organisations use AXELOS's best practice methodologies, under which 5 million people worldwide are certified today. The business has c.100 employees and in 2020 generated revenue of £42.9m and profit before tax of £24.3m. The AXELOS senior management team comprises: Mark Basham, Richard Gray, Margo Leach, Matthew Hunt, Catherine Newman and Jonathan Archibald

About Capita

Capita is a consulting, transformation and digital services business. Every day our 55,000 colleagues help millions of people, by delivering innovative solutions to transform and simplify the connections between businesses and customers, governments and citizens. We partner with clients and provide the insight and cutting-edge technologies that give time back, allowing them to focus on what they do best and making people's lives easier and simpler. We operate in the UK, Europe, India and South Africa - and across six divisions: Customer Management; Government Services; People Solutions; Software; Specialist Services; and Technology Solutions.

Further information can be found at: http://www.capita.com

About PeopleCert

PeopleCert is a global leader in the assessment and certification of professional skills, partnering with multi-national organisations and government bodies. PeopleCert develops and deliver market leading exams across 200 countries every year in 25 languages, through a network of 2,500 centres and 30,000 venues worldwide. Since 2018, PeopleCert has been the exclusive Examination Institute for the delivery of AXELOS' programmes worldwide.

Important Notices

Barclays, which is authorised by the Prudential Regulation Authority ('PRA') and regulated in the United Kingdom by the Financial Conduct Authority ('FCA') and the PRA, is acting exclusively for AXELOS and no one else in connection with the potential sale and will not be responsible to anyone other than AXELOS for providing the protections afforded to clients of Barclays nor for providing advice in relation to the proposed sale or any other matter referred to in this announcement.

Goldman Sachs International, which is authorised by the PRA and regulated by the FCA and the PRA in the United Kingdom, is acting exclusively for Capita and no one else in connection with the matters referred to in this announcement and will not be responsible to anyone other than Capita for providing the protections afforded to clients of Goldman Sachs International, or for providing advice in relation to the matters referred to in this announcement.