£60m deal agreed to sell stake in environmental research joint venture

Business process outsourcing and professional services company, Capita plc, has agreed to sell its 75% stake in York-based Fera Science Ltd to Bridgepoint Group plc for an enterprise value of £60m.

The deal values the total joint venture at £80m. 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.

It will provide additional liquidity to further strengthen Capita’s balance sheet and support investment across the Group.

Fera, based at the York Biotech Campus, 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.

As part of the deal, all current Fera senior management and employees will remain with the business when Bridgepoint becomes the new majority shareholder on completion.

Jon Lewis, Capita’s chief executive officer, said: “We are very pleased to have agreed the sale of our stake in Fera after a competitive auction process.

“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.”

Capita is being advised on the transaction by Strata Partners. KPMG acted as financial adviser to Defra on the deal.

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