Capita acquires key BBC partner iQor

Capita has just announced the acquisition of iQor Holdings UK Ltd and subsidiaries (iQor UK), from its US parent company, iQor Holdings Inc for £42m. PE-backed iQor Holdings is a 14,000 person-strong BPS player based in New York with capabilties across customer care, customer retention and revenue recovery services mainly to the US market.  

For the UK business, Capita is paying £40.5m in cash on a cash free, debt free basis and taking on a pension deficit of £1.5m. This is just under 2x revenue of £21.8m, which it made in the year to 31 December 2012, but Capita gets a very profitable business, with a 30% margin in FY12.

iQor UK specialises in debt recovery services, and apparently provides services to around 20 public and private sector companies including high street retailers. iQor UK will add some 450 people to Capita based in Preston, and CE Paul Pindar said the business will expand Capita’s debt management capability, into `late stage' debt recovery, alongside its existing early and final stage businesses.

iQor will become part of Capita’s customer management business, which it has built up through acquisition of companies like Venture and Vertex Public Sector. iQor is a key partner to Capita at the BBC (see Capita wins key BBC renewal). A shrewd move for Capita, which will now be able to keep this pass through business and the profit generated from that key contract.