London-listed outsourcing firm Capita has secured an extension to its contract with Barnet council worth up to £57m, as it sold a division worth £150m.
The company will continue to work with Labour-run Barnet Council to deliver back-office services in a deal worth £42.7m, with potential add-ons.
With indexation and extra work the extension could reach £57m, with the contract extension starting September next year, when Capita’s existing 10-year deal runs out.
The deal comes as Capita announced it will sell Pay360 to Access PaySuite, in a deal that values Pay360 at £150m.
It expects gross proceeds of £156m upon completion, to “reduce indebtedness and provide additional liquidity” and “allowing Capita to enhance its digital offerings for clients”.
Al Murray, its CEO for Capita Public Service, said “from next September onward, we will support the council by investing in and enhancing its digital capabilities.”
We will also be providing stable and continuous delivery of services that residents and businesses interact with every day.”
“This extension follows on from the successful renewal of our PCSE contract with NHS England earlier in the year..”
Reflecting on the sale of Pay360 to Access, Jon Lewis, Capita’s Chief Executive Officer, said it was “part of our strategy to simplify and strengthen” the firm.
“Capita will utilise the cash proceeds of the sale to benefit our digital offerings for clients and further reduce net debt. The Pay360 senior management team and employees will remain with the business as they transfer to new ownership”