avocis to be acquired by Capita

3 February 2015

     European contact centre specialists, avocis, to be acquired by Capita     

Capita has agreed to acquire avocis, a leading provider of customer contact
management services in Germany, Switzerland and Austria (DACH), for €210m (£
157m) on a cash/debt free basis, subject to approval by the German competition
authority, Bundeskartellamt. avocis has a strong position in the German
speaking regions of Europe serving similar sectors to Capita's UK-based
customer management business, with high quality, long term clients particularly
in telecoms and utilities.

avocis is currently under private equity majority ownership. In the financial
year ended 31 December 2014, avocis had pro forma revenues of €210m (2013: €
173m) EBITDA of €29.8m (2013: €23.3m) and EBITA of €25.4m (2013: €19.7m).
Germany accounts for 53 per cent of its revenue, where it is
the third largest customer management services provider by sales, with the
majority of the remainder generated in Switzerland, where it is market leader.
avocis is expected to achieve Capita's post-tax ROCE target[1] in its second
full year under ownership.

Acquisitions, alongside generating profitable organic growth, are a key part of
Capita's business model to both build its capabilities and increase its market
reach and penetration across a growing number of sectors. Capita now operates
across 11 diverse market sectors in the growing UK business process and
customer management market. The acquisition of avocis enables Capita to
similarly build scale in the DACH region, delivering services that it knows
well and creating an additional growth platform for Capita's wider services in
this large and growing market.

The DACH region has 110m German speakers and, with Germany the largest economy
in Europe, offers an excellent opportunity for growth.  The region has an
established business process outsourcing and customer management market but it
is currently more fragmented and less penetrated than the UK, providing
significant opportunity for a transformational outsourcing partner. The German
outsourced customer and business process management market in 2014 was
estimated to be worth €19.5bn and is expected to grow at 6 per cent annually to
2018[2].

Capita entered the German market in June 2014, with the acquisition of
tricontes, a niche customer management business. In January 2015 it acquired
Dortmund based Scholand and Beiling, which provides customer management
consultancy services and has extensive relationships across the sector. The
combined acquisitions, allied to UK expertise gained in the relevant markets,
places Capita in a unique position to develop opportunities in the DACH region.

Capita chief executive, Andy Parker, said: "We are excited by the opportunities
in the DACH region. The acquisition of avocis provides us with immediate scale
and further capabilities in this territory. avocis has a strong position in the
German speaking regions of Europe with long term and growing relationships with
quality private sector clients. We will be able to offer these clients access
to Capita's wider transformation capabilities and services and establish a
strong platform for developing relationships with new clients in the region. We
are already in discussions with a number of our existing UK clients who have
European parents and subsidiaries, regarding the potential to extend current
contracts and agree new ones in this region."

The combined operations in the DACH region will form a new division and will
initially be led by Vic Gysin, Joint Chief Operating Officer, alongside his
existing duties. Vic will work closely with the existing strong management
teams to bring these businesses together and connect with the wider Capita
capabilities.

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Note to editors

Capita plc is the UK's leading provider of BPO and integrated professional
support service solutions. With 66,000 people at over 400 sites, including 73
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 2013 revenue
of £3.9 billion. Further information on Capita plc can be found at:
www.capita.co.uk      

1. Capita's target post tax return on capital invested in acquisitions is 15%.

2. Source: NelsonHall