Capita in exclusive talks to sell education unit

27 November 2020, 14:24

Primary school pupils in a maths class
School stock. Picture: PA

The outsourcer confirmed it is talking exclusively with private equity house Montagu.

Outsourcing giant Capita has revealed it is in exclusive talks with private equity house Montagu over a possible sale of its education platform division.

Capita announced in the summer that it wants to sell its Education Software Solutions (ESS) arm to reduce its debts but has so far failed to attract a high enough bid.

The company said on Friday: “Capita confirms it has entered into exclusive talks with Montagu over the potential sale of ESS.

“There can be no certainty that a sale will be concluded nor any certainty over the terms of any such sale.”

The firm’s Sims (School Information Management System) platform is used in 21,000 schools across England, Wales and Northern Ireland and speculation had initially suggested it could be valued at £700 million.

Sources close to the negotiations said this initial estimate is wide of the mark and the values under discussion are closer to between £350 million and £400 million.

The entire Capita business is currently worth around £750 million, based on current share prices.

According to reports last month, Capita received interest from investment firms Bain Capital, TPG and CVC Capital Partners but all three balked at the high price being asked for ESS.

Capita is best-known for overseeing licence fee collections for the BBC.

By Press Association