Capita to sell Pay360 to Access PaySuite in £150m deal

Consulting and digital services Capita is to sell its UK-based Pay360 business to Access PaySuite in a deal worth £150 million, set to close in Q4 2022.

The sale, contingent on the approval of Capita shareholders and regulatory approval, represents a 14.3x multiple on 2021 earnings before interest, taxes, depreciation and amortisation (EBITDA) of £10.5m.

Capita says the deal will help lower the firm’s debt and provide additional liquidity, strengthening its balance sheet and allowing it to invest in client-facing digital offerings.

The Pay360 senior management team and employees will remain with the business following the transaction.

Capita CEO Jon Lewis says the decision to sell Pay360 is part of the firm’s strategy to “simplify and strengthen” Capita, while Pay360 will benefit from “the focus that this change of ownership will bring”.

Lewis adds: “Capita will utilise the cash proceeds of the sale to benefit our digital offerings for clients and further reduce net debt.”

Pay360 was launched by Capita in April 2015. It has around 2,500 customers across the public and private sectors, offering gateway and acquiring services and other payment solutions. The company processed £8.6 billion in transaction value across 142 million transactions in 2021.

For H1 2022, Pay360 generated revenue of £27.3 million, EBITDA of £5.7 million and profit before tax of £3.1 million.