02 Apr 2007

The Capita Group Plc ('Capita'), announced today that it has acquired CMGL from Sovereign Capital Partners LLP. CMGL is a leading provider of outsourced claims and insurance management services to FTSE quoted corporations, general insurers, Lloyd’s underwriters and London Market companies.

The consideration is £32 million on a cash-free/debt free basis. CMGL employs more than 440 staff based in London, Cheltenham, Birmingham and overseas, and provides professional claims and insurance management services to a wide range of insurance and corporate clients. The acquisition will build on Capita Insurance Service’s existing London Markets capability.

CMGL's consolidated audited accounts for the year ended 31 December 2005, recorded an annual turnover of £41.49 million and operating profit of £1.23 million. As at 31 December 2005 CMGL had consolidated audited net assets of £12.05 million.

Commenting on the deal, Paul Pindar, Capita Chief Executive said: ”Established in 1993, CMGL has grown consistently through organic expansion and the acquisition of specialist companies. Its acquisition will allow us to offer our customers complete end-to-end services in both the live and run-off markets. Building this sort of capability is particularly important given the challenges set out in the London Market reform as well as the cross market desire to introduce truly world class business processes. Capita-CMGL will work hard to ensure that its clients and the London Market have real choice when it comes to the range and depth of support they need to succeed in a growing market. We intend to merge CMGL with our existing London Market operations, which will create significant economies of scale and will help to ensure that London remains at the heart of the world’s insurance industry.”

Jerry McArthur, managing director of CMGL said “We welcome this deal and see it as a marriage of two very complementary businesses. Being an integral part of a FTSE100 company allows us to offer a wider portfolio of bespoke services and solutions. It also fundamentally enhances our capacity to support the London Market and all our clients with large scale business transformation. The bringing together of two well-established businesses provides our staff with exciting opportunities to grow their skills and careers over the long term.”

 The deal has received approval from the FSA and Lloyd’s.