Capita PLC (LON:CPI) has struck a deal to sell its Education Software Solutions for up to £343mln to a private equity fund.
Speculation in the media had put a valuation of £500-700mln on the ESS business, which would be 10-14 times underlying profits (EBITDA).
Montagu Private Equity will pay the FTSE 250-listed outsourcer £298mln on completion, which is expected early in 2021.
Capita will get a further £45mln based on Montagu’s separately agreed investment in ParentPay, another provider of education technology, once it has achieved regulatory approvals.
Following successful completion of both deals, Education Software will become part of the ParentPay Group.
Also part of the deal, Montagu has agreed to assume liabilities such as working capital and debt worth £57mln, which gives Education Software Solutions a total value of £400mln.
Capita said £50mln of the cash will be used to replace the remaining value of an asset-backed financing agreement entered into with the Capita pension scheme, while the remaining £293mln of the proceeds will be used to strengthen its balance sheet.
The shares rose 3% to 46.83p by mid-morning on Monday, still down 72% since the start of the year.