Capita Sells Commercial Contact Center Unit to Inspirit in Deal With Up to £61M Earn-Out

Core Viewpoint - Capita is divesting its commercial contact center business to Inspirit Capital for a nominal price of £1, with potential additional considerations of up to £61 million based on future performance and liquidity, aiming to streamline operations and focus on its core strengths in middle- and back-office services [2][5]. Financial Terms and Transaction Structure - The total consideration for the sale includes £11.5 million contingent on future cash availability and up to £50 million as an earn-out linked to the business's performance in 2026-27 [5][6]. - The transaction is expected to incur around £20 million in restructuring and separation costs, with Capita funding up to £10 million of these costs [3][12]. Performance Context - The commercial contact center business was loss-making in 2025, reporting a loss of approximately £35 million and a cash outflow of £16 million, while retained contracts outside the sale were profitable, contributing £17.9 million in profit and £23.1 million in positive free cash flow [4][8][7]. Cost Savings and Profitability Outlook - The disposal supports a targeted £40 million savings program aimed for completion by the end of 2027, with £25 million of these savings expected from overhead costs previously allocated to the contact center business [13]. - Capita anticipates a 200 basis point improvement in operating profit by 2027, moving from an operating margin of 5.2% to 7.2% [15]. Strategic Focus - The company aims to become an AI-led business process outsourcer, emphasizing complex middle- and back-office services, while retaining certain contact center capabilities embedded within broader contracts [16][17]. - Capita plans to provide further details on its strategy and targets at a Capital Markets Day scheduled for June 17 [18].