Constructionline to be acquired by Capita

28 January 2015

                   Constructionline to be acquired by Capita

The Department for Business, Innovation and Skills (BIS) has announced,
following the completion of a competitive sales process, that Capita plc
(`Capita') is the successful bidder to acquire the assets of Constructionline
for £35m on a cash free, debt free basis.

Constructionline is one of the UK's largest procurement and supply chain
management services and was set up by BIS (formerly the Department of the
Environment, Transport and the Regions) initially for public sector contracts.
It aims to reduce the annual cost (currently £165m) for construction industry
buyers and suppliers, particularly SMEs, of repeatedly providing pre tender
information. Capita was awarded the original concession to run
Constructionline, by the Government, in 1998 and was successful in the
subsequent re-tenders.

As the new owner Capita will be able to further invest and commercialise
Constructionline, delivering enhanced services to both the private and public
sectors. Capita will extend the range of value added procurement services it
offers contractors and suppliers. Initially focusing on construction, it will
also develop similar services for other industries. To support this expansion
Capita will invest in a new IT system which will make the business more
effective and agile and improve efficiency, bringing more automation to the
application process.

Andy Parker, Capita chief executive, said: "Capita has run Constructionline
successfully for more than 16 years, building one of the largest buyer and
supplier service organisations of its kind, helping buyers achieve compliance
and returning regular income to BIS and the tax payer. But under public sector
ownership, there have, understandably, been a number of constraints to the
service reaching its full potential.

"In spite of its success to date, Constructionline currently provides its
services to less than 15 per cent of the addressable suppliers in the
construction industry, a market estimated to be worth more than £30m annually.
We believe that we can accelerate our penetration of both this and new market
sectors and with a broader and more value added service we will be able to grow
Constructionline rapidly. We therefore expect to increase revenues by 40 per
cent over the next two years and achieve the company's acquisitions target
return on invested capital1."

Constructionline's revenue was £9.3m and pro forma operating profit £4.1m in the year to
December 2014.

For further information:

Capita plc
Tel: 020 7799 1525
Andy Parker, Chief Executive Officer
Shona Nichols, Corporate Communications Director

Media enquiries only:
Capita press office
Caroline Mooney
Tel: 020 7654 2152 or 020 7654 2399 (out of hours)
Email: caroline.mooney@capita.co.uk

Notes to editors

 1. Capita's target post tax return on capital invested in acquisitions is 15%
    after 12 months integration within the group.

Capita plc is the UK's leading provider of BPO and integrated professional
support service solutions. With 66,000 people at over 400 sites, including 73
business centres across the UK, Europe, India and South Africa, the Group uses
its expertise, infrastructure and scale benefits to transform its clients'
services, driving down costs and adding value. Capita is quoted on the London
Stock Exchange (CPI.L), and is a constituent of the FTSE 100 with 2013 revenue
of £3.9 billion. Further information on Capita plc can be found at:
www.capita.co.uk



END
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