Inspirit Capital buys Capita’s Modular People Solutions for GBP 21m

Capita expects to receive cash proceeds of GBP 21m for the deal on a cash and debt-free basis. The reported revenue and profit before tax of the combined businesses for the year to 31 December 2022 were GBP 78m and GBP 10m, respectively, and gross assets were GBP 35m at 31 December 2022, according to a press release. The three businesses were formed around two years ago and rebranded as Modular People Solutions.

Inspirit Capital invested through Inspirit Fund I, a special situations fund, which held a final close in December 2019 on its GBP 50m hard cap. It targets UK SMEs with enterprise values between GBP 20m and GBP 50m and deploys cheques between GBP 2m and GBP 10m. The deal marks the seventh investment from the fund, which is expected to make another one to two deals, and is around 70% deployed, Albert Farrant, a partner at the sponsor, told Unquote.

Inspirit specialises in acquiring businesses that are no longer a core operation to their parent company. The carve-out focused GP bought the businesses following a competitive sale process. Under its ownership, Modular People Solutions will focus on human capital services, whilst retaining key sub-brands including Veredus, ThirtyThree and Novus. It will also focus on operational improvements and strengthening its IT systems, Farrant said.

Capita previously expressed its intention to sell a number of non-core businesses to strengthen the balance sheet and focus on its two core divisions, Capita Public Service and Capita Experience. The deal also reduces Capita’s debt, as it continues to simplify and strengthen its organisation, according to the press release. It will focus on selling the majority of the remaining non-core portfolio businesses throughout the first half of 2023, depending on general market conditions.

This deal follows the recent disposal of Pay360, a payments processing business, two real estate and infrastructure consultancy businesses, as well as Optima Legal, and Capita Translation and Interpreting, according to the press release.

Mergermarket reported in January 2023 that Capita was seeking to sell UK-based business services provider Fera, with sponsors Bridgepoint Development Capital and Agilitas submitting preliminary bids.

Company
Modular People Solutions is based in the UK and the US, and employs over 1,000 staff. It provides recruitment, training, human capital services. It supports 2,000 multinational corporates, SMEs and public sector clients across various sectors.

People
Inspirit Capital – Will Stamp (partner), Albert Farrant (partner).
Capita – Jon Lewis (CEO).
Modular People Solutions – Briony Lydon (managing director).

Advisors
Equity – Squire Patton Boggs (legal); FRP Advisory (financial due diligence); European Valuations (asset valuation); JacksonBreen (IT due diligence).
Vendor – Rothschild & Co (corporate finance).

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• Topics
• Exits
• Buyouts
• Support services
• UK / Ireland
• United Kingdom
• Carve-out
• Inspirit Capital