Acquisition

Capita Group PLC 29 May 2001 29 May 2001 Capita to provide end-to-end outsourcing services for the insurance market Proposed acquisition of the UK business of McLarens Toplis. The Capita Group Plc ('Capita') is to acquire 100% of the share capital of McLaren Dick & Company Ltd ('McLarens'), the UK business of McLarens Toplis, a leading provider of services to the insurance sector and the UK's second largest loss adjusting company. The total purchase consideration is £33 million of which £5 million is subject to retention until April 2003. Capita has received wholly irrevocable acceptances of the offer from shareholders holding 75% of the share capital in McLarens. The offer is expected to be accepted in full by 15 June 2001. The consideration is payable in a combination of cash, loan notes and new ordinary shares in Capita as selected by each individual shareholder in McLarens. The acquisition is anticipated to be earnings enhancing for Capita in the current year. Capita is not purchasing the residual international business of McLarens Toplis, which is being retained by the existing shareholders and will be trading solely outside the UK as McLarens International Group. With over 1800 people working across 70 sites in the UK, McLarens provides complete outsourcing services for claims management and delivers both commercial and domestic loss adjusting services. McLarens handles all major classes of insurance primarily through long-term contracts for its extensive customer base, which includes all the major UK General Insurers. The business will be renamed Capita McLarens. In the year to 30 April 2001, the UK business of McLaren Dick & Company Ltd reported a trading profit of £3.6 million before Partners' bonuses (2000 audited: £5.1 million) on turnover of £73 million (2000 audited: £70 million). At 30 April 2001, McLarens had net assets of £5 million. Commenting on the acquisition, Rod Aldridge, Executive Chairman said: 'It is clear that the insurance market is currently undergoing significant change and there is an increasing interest in the opportunities afforded by outsourcing the entire policy management process, spanning initial interaction with customers right through to claims administration and settlement. The acquisition of McLarens coupled with Capita's existing capability, delivered through Capita Eastgate, provide Capita with an unparalleled capability to provide a total outsourcing service to the UK insurance sector. Our customer bases are complementary and there will be excellent opportunities to develop and add value to these customers with the bringing together of our services and expertise. We estimate that this market is worth some £4 billion a year and is currently delivered in-house.' Ian Muress, Group Chief Executive of McLarens added: 'Capita's scale, financial strength and track record in the insurance sector gives a very real opportunity for McLaren's to develop business of a size which would not have been possible under private ownership. We have already identified a number of opportunities to provide a wide range of insurance outsourcing services to our existing customer base and Capita's ownership will assist these to come to fruition.' -Ends- For further information: The Capita Group Plc 020 7799 1525 Rod Aldridge, Executive Chairman Paul Pindar, Chief Executive Shona Nichols, Group Marketing Director Press Office 020 7544 3141 Issued by Hogarth Partnership 020 7357 9477 James Longfield/Georgina Briscoe Notes to Editors The Capita Group Plc The Capita Group Plc is one of the largest and fastest growing professional support services organisations in the UK. Capita provides an integrated range of professional support services on long-term contracts across the private sector, local and central government and education in the UK. With over 11,000 people working across a network of over 120 sites, generating a turnover in excess of £450 million, Capita's achievements promoted it to the FTSE 100 in 2000. Capita draws on their wide base of skills and sector expertise to generate and successfully implement tailored service solutions. Capita's capability spans leading edge customer and administration services, HR services, IT and strategic support, software and property consultancy. Capita Eastgate currently has over 500 clients, deals with 5million assistance calls, collects 9 billion in premiums, and administers 1 million claims a year.

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