Selected to form JV IP business with Cabinet Of...
26 April 2013
Capita selected to form a best management practice
training tools and accreditation joint venture with the Cabinet Office
Capita plc ("Capita") announces that it has been selected, following a
competitive procurement process, to form a joint venture ("JV") company with
the Cabinet Office to deliver and commercialise the Government's portfolio of
best management practice training tools and services and create a growth
business in which both parties will share returns.
The Government has developed a proprietary portfolio of leading and globally
renowned best management practice training tools, including PRINCE2®, an
established and proven project management methodology, and ITIL®, the most
widely accepted approach to IT service management in the world. The products
are widely used in the public sector and increasingly used across private
sector organisations and internationally. Revenues are currently generated
through royalties from training materials and fees from an ecosystem of
accredited training, examination and certification organisations.
Through an innovative business partnership, Capita and the Cabinet Office have
established a 51%:49% JV organisation that will own the intellectual property
("IP") of this portfolio of products and assume the management and support of
the ecosystem of accredited service organisations. Capita was selected having
demonstrated its strong track record of successfully acquiring, developing and
growing small to medium sized organisations and transforming services. It will
draw on this expertise to create a new JV business capable of fully developing,
commercialising and growing the portfolio of best practice training tools and
achieving greater market penetration both in the UK and internationally.
Capita is paying the Cabinet Office an upfront cash payment of £10m and three
deferred cash payments of £9.4m over the first three years for a 51%
shareholding in the joint venture, which will own in perpetuity the IP of the
portfolio of products. It is anticipated that the joint venture will triple the
current revenues of approximately £40m per annum by year 10, through further
commercialising and developing the product portfolio in existing and new
markets, and generate healthy margins.
Paul Pindar, chief executive of Capita plc, stated: "We are thrilled to be
selected as a partner in this innovative business model that uniquely combines
assets and capabilities from the Government, Capita, current employees and the
ecosystem of the existing and new SME service providers. The commercial,
technical and innovation skills that we bring to the JV will help to create a
thriving business capable of delivering real value to all parties and releasing
a secure and growing income to the Government.
"We have detailed plans in place to stimulate and support the strong growth of
the ecosystem and create a successful and sustainable JV. We will develop the
current portfolio, including digitising services and introducing experiential
learning methods such as gaming and simulation, and broaden both the products
and the markets in which they are sold across the UK and worldwide.
"The JV will create a strong and growing market for learning, accreditation and
examination organisations, with the majority being SMEs, and provide an
excellent platform for helping to improve skills and employability.
Additionally, the commercial success of the JV will not only be shared by the
joint shareholders but also the employees, who will share a performance bonus
pot of 5% of the JV's pre-tax profits."
Francis Maude, Minister for the Cabinet Office said: "The state is littered
with potential businesses which could be bringing in revenue, creating jobs and
driving economic growth. We are committed to getting Britain ahead in the
global race, which is why we want to exploit these hidden gems and use the
profits to protect our frontline public services.
"It's a great endorsement of the Civil Service that major companies use PRINCE2
and ITIL but business expertise and investment is needed to develop them
commercially. This partnership shows that business is ready to work with us in
innovative ways to make substantial savings to taxpayers and paves the way for
many similar deals in future."
The existing products and services will maintain their current brands and the
JV will be branded to support both the current and growing portfolio of
products and services. The JV will assume ownership and management of the
current portfolio from 1 July 2013 and full operational delivery from 1 January
2014.
- ends-
For further information:
Capita plc
Tel: 020 7654 2219
Paul Pindar, Chief Executive Officer
Shona Nichols, Corporate Communications Director
Media enquiries only:
Capita press office
Lydia Ruffles
Tel: 020 7654 2192 or 020 7654 2399 (out of hours)
Email: lydia.ruffles@capita.co.uk
Notes to editors
Capita plc is the UK's leading provider of business process management and
integrated professional support service solutions. With 52,500 people at more
than 350 sites, including 70 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 2012 revenue of £3.3 billion and profit before tax of £426
million. Further information on Capita plc can be found at: www.capita.co.uk.
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