Capita plc (‘Capita’) today announces that it has agreed to sell Pay360 Limited (‘Pay360’) to Access PaySuite, a division of The Access Group (‘Access’) in a deal that values Pay360 at £150m on a cash-free, debt-free basis, representing a 14.3x multiple on 2021 EBITDA of £10.5m.

Taking into account cash-like and debt-like items, Capita expects to receive gross proceeds of c.£156m upon completion. The sale will help reduce indebtedness and provide additional liquidity, which together shall further strengthen Capita’s balance sheet, whilst also allowing Capita to enhance its digital offerings for clients.

The sale of Pay360 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; notification and confirmation from the Secretary of State that no further action will be taken under the UK’s National Security and Investment Act; and change in control clearance from the Financial Conduct Authority (“FCA”). These conditions are currently expected to be satisfied in late Q4 2022.

Pay360 is a UK-based, FCA-regulated payments business with c.2,500 customers across the public and private sectors. Pay360 offers its customers gateway and acquiring services, as well as payment solutions across the payments value chain. Pay360 has recently expanded its capabilities into payment facilitation with the launch of its Evolve platform. In 2021, the business processed £8.6bn in transaction value across 142 million transactions.

The gross assets of Pay360 on 30 June 2022 were £63.6m, and for the year to 31 December 2021, it generated revenue of £45.8m, EBITDA of £10.5m and profit before tax of £7.1m. For H1 2022, Pay360 generated revenue of £27.3m, EBITDA of £5.7m and profit before tax of £3.1m. The Pay360 senior management team will be transferring with the business.

The sale of Pay360 follows a strategic review of the business by Capita and represents further progress in our strategy to build a more focused, sustainable business for the long term.

Jon Lewis, Capita’s Chief Executive Officer, said:
“We are pleased to have agreed to the sale of Pay360 to Access. We announced our intention to sell Pay360 during our half-year results, as part of our strategy to simplify and strengthen Capita. The sale is a great opportunity for the new owners to help Pay360 realise its full potential, and our colleagues at Pay360 will also benefit from the focus that this change of ownership will bring. Capita will utilise the cash proceeds of the sale to benefit our digital offerings for clients and further reduce net debt. The Pay360 senior management team and employees will remain with the business as they transfer to new ownership”

Barclays Bank PLC, acting through its Investment Bank (‘Barclays’) is acting as the sole financial advisor and sole sponsor to Capita on the transaction.