AdvancedAdvT Limited has agreed to buy five software businesses from Capita plc for in initial £33m.

Capita say the sale of CIBS, CHKS, Retain, WFM and Synaptic is part of its strategy to sell a number of non-core businesses to strengthen its balance sheet and focus on its two core divisions, Capita Public Service and Capita Experience.

AdvancedAdvT buys and invests in software and services businesses with the focus on organic growth and synergistic M&A.

The company is led by chairman Vin Murria OBE, who previously founded and was CEO of Advanced Computer Software Group plc (2008-2015).

The company raised £130m through a fundraising in March 2021 with the support of leading institutional investors to pursue its stated investment strategy of seeking mid-cap acquisition opportunities in the software sector.

In addition to organic growth, the Capita acquisitions will create a platform to develop the company by exploring growth opportunities in synergistic sectors and by targeted investment and M&A activities.

Vin Murria said: “We are delighted to start our next journey with the great teams from across these businesses and look forward to working with them.

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“As has been our model in previous vehicles, ADVT will support the teams in delivering strong new organic growth – both in existing sectors as well as new areas including data, analytics, managed service and digital transformation opportunities.

“Equally, we are excited to drive new opportunities and with a substantial war chest, the business is well placed to execute M&A that is both synergistic and accretive over the longer term.”

Jon Lewis, Capita’s CEO, said: “We are pleased to have agreed the sale of these non-core software businesses to AdvancedAdvT following a competitive sale process.

“The sale marks another step for our successful disposals programme which has enabled us to significantly strengthen the balance sheet and materially reduce our debt.

“We continue to target for the majority of the remaining businesses within our non-core Portfolio division to be sold during the first half of 2023, depending on general market conditions.”

In the year to the end of 2022, the combined reported revenue and profit before tax of the five non-core software businesses were £35m and £3m respectively.

A total of 74 per cent of the revenue was from recurring or from Software-as-a-Service (SaaS).

The transaction will be funded by the company’s cash reserves.

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The acquisitions are subject to and conditional upon National Security and Investment Act approval.