- Capita
- 27 March 2026 14:41:10
Source: Sharecast
Capita announced on Thursday that it had agreed to sell the business to Inspirit Capital.
The division is being sold for a nominal £1, with £6.5m cash retained in the business upon completion for normal working capital purposes. In addition, there is a potential contingent consideration of up to £61.5m, expected to be paid in 2027 and 2028. Of that, £50m is based on future financial performance of the disposed business and £11.5m on cash availability.
Capita said a small number of UK public sector related contracts - previously reported within Capita Experience under the contact centre operating segment - are excluded from the transaction and will remain within the group.
RBC said the exit is "slightly convoluted" and will rely on Capita to unlock a material overhead reduction, but overall the transaction is "very positive".
The bank cut its 2026 earnings per share estimate but lifted its forecasts for 2027/28 by around 8% as the overhead reduction is delivered.
RBC, which rates the shares at ‘outperform’, said it has reworked its sum-of-the-parts valuation for the several moving parts. It has moved it to a 2027 basis, and updated for peer group valuation movements.
The target price was left unchanged at 450p. However, the bank said this conservatively still values Public Service at a 15% discount to peers, Pension Solutions at a 25% discount to XPS and assumes no contingent consideration received and no mitigation on under-utilised lease costs.
"If we were to value in line with peers and assume all the contingent consideration is paid and lease costs can be mitigated, then our valuation would move to circa 800p," it said.