The Office of Fair Trading (OFT) has cleared the way for Capita to complete its acquisition of Vertex Private Sector (see Capita buying Vertex private sector arm) because it didn’t ‘qualify for investigation under the mergers provisions of the Enterprise Act 2002’. Capita's much larger purchase of Ventura in July (see Capita gains 8,000 with Ventura deal) went through without being flagged to the OFT.
Capita’s dominance in the UK BPS market means it does from time to time come up against ‘merger situations’ with the OFT. The most recent of these was its acquisition of IBS OpenSystems in April 2009 (see here), due to OFT concerns over Capita taking out one of its key rivals in revenues and benefits (R&B) software. Capita had to sell IBS’ R&B software to secure the deal, and as HotViews readers will know, Civica was the buyer (see here).
It is far easier to see a 'merger situation' arise in the relatively small R&B software market (c£20m per annum according to the OFT) dominated by just three players (Capita, IBS/Civica and Northgate). It becomes a lot harder in the wider IT/BPS market however, which is less narrowly defined and where the addressable market is orders of magnitude larger.