Capita coughs up £29m for financial services house

Offshorer looks offshore to dodge UK public sector turmoil

Capita has splurged £29m on AIB International Financial Services, (AIBFS) as it continues to broaden its commercial base outside of the UK.

The deal – subject to regulatory approval in Ireland, Luxembourg and the Netherlands – will give the company entry into Switzerland and Hungary as well as adding a chunk of revenues to its bottom line. AIBFS had sales of £24m in calendar 2010 and made a £6.2m operating profit.

Dublin-based AIBFS provides a number of outsourcer services, including corporate administration, treasury management, securitisation and middle and back office services to financial houses and enterprise clients.

It employs 100 staff at Dublin HQ and another 60 in mainland Europe.

The plan is to integrate the business into Capita's investor and banking services unit, which turns over around £108m a year of the group's £2.3bn revenues. The unit already employs around 2,000 people in the UK, Ireland and parts of the continent.

Analyst TechMarketView pointed out that with Capita struggling to push up profits organically in the UK, further geographic diversification was on the cards. Capita expanded a contract with Zurich financial services to EMEA in June.

"Today's move shows that Capita certainly isn't hanging around," said TMV stalwart Georgina O'Toole, "and is all set to use its vast experience of M&A to realise its ambitions sooner rather than later."

She added: "Capita must rise to the challenge of managing its business across multiple geographies. " ®