Capita has sold mid-market case, matter and practice management vendor Eclipse Legal Systems to Access UK Limited – a mid-market software vendor selling to multiple sectors from industrial and manufacturing to financial and professional services.
The total agreed consideration reflects an enterprise value of £56.5m on cash and debt free basis and represents a multiple of 14.1 times Eclipse’s adjusted earnings before interest, tax, depreciation and capitalised development costs.
The transaction is due to complete on 30 June 2020 and is not subject to any conditions.
The statutory gross assets of Eclipse at 31 December 2019 were £20.5m and the statutory profit before tax for the year ended 31 December 2019 was £5.5m.
All of the Eclipse Senior Management Team will be transferring with the business.
Jon Lewis, Capita’s chief executive officer, said “This disposal forms part of Capita’s strategy to simplify, strengthen and succeed. It will help us simplify by disposing of a standalone business, while the disposal proceeds will help strengthen Capita’s balance sheet. At the same time, our colleagues at Eclipse will benefit from a committed new owner, supporting further investment and growth.”
Pete O’Brien, managing director of Eclipse, said “We are excited about this transaction. With the support of Access, we are committed to delivering continued growth and investment in our products for our clients as well as working with Access to identify areas of potential revenue synergies”.
Dentons advised Capita.
Comment: Capita acquired Eclipse in September 2014 and while the sum was undisclosed we hazarded a guess of around £24m based on factors including its results and trading record, meaning – if our ballpark was right – that the price has more than doubled in six years.