Outsourcing services provider Capita Group Plc has expanded its presence in the insurance sector with the purchase of Cost Auditing Holdings Ltd for a potential 7.9m pounds ($11.9m).
The target company audits bills submitted by claimants’ lawyers including analysis of staff appropriateness, hours billed, and hourly rates. It handles more than 30,000 claims annually and made an operating profit of 1.2m pounds ($1.8m) on revenue of 4.2m pounds ($6.3m). Some 53 staff will transfer to Capita as part of the deal.
Capita, which takes over the running of many of its clients’ IT functions as part of its business process outsourcing contracts, will pay an initial 4.9m pounds ($7.4m) in cash, plus a possible earn-out of 3m pounds ($4.5m) cash at the end of March 2005.