Outsourcer Capita (CPI) completed another vital step in its recovery plan, after agreeing the sale of its asset services division. The group will sell the business to Link Administration for a cash-free, debt-free price of £888m - around £65m higher than the top end of the consensus range expected by analysts. The deal is expected to complete during the last quarter of the 2017.
The support services giant will pay £72m in transaction expenses, including a £17m one-off pension contribution, and use the rest of the money to reduce indebtedness. The latter is crucial to management's efforts to shore up the group's balance sheet. At the end of December, net debt sat at £1.78bn, or 2.89 times cash profit on an adjusted basis. This was up from 2.45 times in the previous year. Management is aiming to reduce this to between 2 and 2.5 times over the longer term.