Capita may be forced to sell prestigious property developer at a loss following allegations that its bosses ‘destroyed’ the company
- The outsourcing firm bought GL Hearn in a deal worth up to £30m in 2015
- GL Hearn is one of half a dozen or so businesses Capita intends to offload to raise £200m
Capita may be forced to sell a prestigious property developer at a loss following allegations that its bosses ‘destroyed’ the company.
The outsourcing firm bought GL Hearn, which has worked on the regeneration of Swansea city centre and the expansion of Luton Airport, in a deal worth up to £30m in 2015.
Bosses said it would be a ‘transformative’ addition to the company – but it is now thought the firm will fail to recoup its investment.
Under the microscope: Capita bought GL Hearn in a deal worth up to £30m in 2015
GL Hearn is one of half a dozen or so businesses Capita intends to offload to raise £200m – including its events and translation divisions.
The Mail understands that the sales process has been put on hold temporarily – but the businesses are still earmarked for disposal.
Alarm bells began ringing at GL Hearn last year when a string of senior employees, including the planning director and head of strategic planning, left for rival firms.
In October an entire team of nine town planners quit to join rival Knight Frank.
Capita, which collects the BBC licence fee and runs the London congestion charge, has been accused of turning the firm into a ‘sinking ship’.
One employee, who claimed to have worked for the developer for three years, said: ‘It has been eviscerated following its acquisition and mismanagement by Capita.’
Another said it had been a ‘very good multi-disciplinary consultancy with an enviable reputation’ but was ‘a rump of its former self’ and ‘unsalvageable’ after Capita ‘destroyed the company for good’. The allegations were made on the Glassdoor website, where employees can leave reviews of their workplaces.
Capita has issued a string of profit warnings in recent years and made a £62m loss in 2019. It has suffered under the pandemic, taking a 10 per cent hit to revenue in the first half of 2020.
It recently sold Eclipse, its legal software business, for £56.5m and may flog its education software arm, ESS, which helps schools record student attendance, manage lunch payments and keep in touch with parents, for up to £500m.
The sale plans are the result of a tricky restructuring initiated by chief executive Jon Lewis, who took over after predecessor Andy Parker was ousted, to move the company away from low-value, labour-intensive contracts to more lucrative hi-tech work.
Capita declined to comment last night.