It’s just fascinating to watch the stealthy moves UK BPO leader Capita makes as it builds up its presence in a market sector piece by piece. Today it’s print managed services, with the acquisition of London-based Right Document Solutions (RDS), for which Capita will pay up to £40m cash. RDS turned over £12m last year (to June 2010) at a 36% (!) pro forma operating margin. At that price this is obviously no fire-sale deal – indeed it is not that often that highly acquisitive (and very shrewd) Capita pays such full multiples for an acquisition. Obviously this is one they want and need. The deal was signed yesterday and top management will stay on.
It seems that print managed services is becoming a ‘focus’ segment for Capita, and this will surely pitch them against some of the giants in the sector, including HP and Xerox. However, Capita is a wily player and its broad contacts and client base in the private and public sectors should provide a fertile hunting ground for RDS.