Capita plc has agreed to sell its 75% stake in Fera Science Limited to Bridgepoint Group plc.

The enterprise value of the deal is £60 million on a cash-free, debt-free basis and values the total joint venture at £80m.

It represents a 10.8x multiple on a 2022 standalone EBITDA of £7.4m.

The sale of Capita’s 75% interest in Fera, a joint venture with the Department for Environment, Food & Rural Affairs (Defra), will result in Capita receiving cash proceeds of £62m upon completion. 

Fera was established in 2015 as a joint venture between Capita (75%) and Defra (25%) to create a financially sustainable business, focused on the agriculture, farming and food production market. It specialises in environmental testing, research, and advisory and assurance services for both the public and private sectors. 

Capita consolidates Fera in its consolidated financial statements. The reported revenue and profit before tax for the year to 31 December 2022 were £45m and £3m respectively. Gross assets were £37m at 30 June 2023.

Defra is retaining its shareholding. All current Fera senior management and employees will remain with the business when Bridgepoint becomes the new majority shareholder on completion.

The sale of Fera and of Capita’s travel businesses, which completed on 14 November, marks the end of non-core disposals from its portfolio division as part of a strategy to simplify and strengthen the business around two core markets.

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“We are very pleased to have agreed the sale of our stake in Fera after a competitive auction process,” said Jon Lewis, Capita CEO.

“Capita and Defra have partnered together to grow and professionalise Fera over the past eight years, creating significant value for us and the taxpayer.

“Fera is now a vibrant and profitable commercial business, successfully serving private sector and government customers in both the UK and overseas.

“We had previously announced our intention to sell our stake in Fera, as part of our ongoing strategy to simplify and strengthen Capita. It was the appropriate time to find a new partner to build on the strong, successful foundations now in place at Fera and take the company onto the next stage of its development.

“This is the latest excellent example of Capita successfully collaborating with the UK Government to commercialise and transform Government assets into valuable businesses, following previous successes including Constructionline and AXELOS.

“I am particularly delighted that, subject to successful completion of this transaction and our travel businesses, which completed on 14 November, we will have completed our non-core disposals programme. These disposals have enabled us to significantly strengthen the balance sheet and materially reduce our debt.”

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