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Carillion has disposed of its external and internal IT services

10 June 2009

Carillion has entered into an agreement for the sale of its external IT Services business for outsourcing, networking and cabling solutions that it acquired with Alfred McAlpine, to Capita and outsourced its internal IT services to Accenture.

The Capita Group Plc (Capita) today announces that it is acquiring Carillion IT Services Ltd (CITS) for a consideration of £36m on a cash free,debt free basis. In parallel with this transaction, Carillion has also entered into a contract to outsource the provision of the Group's UK internal IT services functions to Accenture, to whom Carillion has already outsourced a range of finance and human resources functions.

These two transactions, which form part of the integration of the Carillion and Alfred McAlpine businesses, are expected to generate gross cash for Carillion totalling £76m during 2009, of which £40m relates to the outsourcing and £36m to the disposal, which is subject to an adjustment for working capital at completion.

CITS is the external facing IT services business of Carillion plc. The business was acquired by Carillion in February 2008 as part of its acquisition Alfred McAlpine plc. CITS offers outsourcing, managed services and
network infrastructure solutions to external clients. This acquisition will add greater capacity and breadth of expertise to Capita's IT Services division. Capita IT Services currently offers organisations the full ICT lifecycle, ranging from business analysis through to a fully managed service. The acquisition of CITS will significantly add to the scale of this offering and bring relationships with a wide range of complementary clients across both the private and public sectors.

Paul Pindar, Chief Executive of the Capita Group Plc, said: 'As well as increasing the scale of Capita's IT Services operations, CITS has a number of key customers and expertise in a range of areas that complement and support Capita's existing capabilities. There will be significant operational and cost synergies from the bringing together of CITS and Capita IT Services. CITS also has a strong presence in Scotland which will support our aim to continue building our operations and offering in Scotland.

Noel McNulty, Managing Director of Carillion IT Services Ltd, said: 'CITS has a proven track record in delivering on business objectives through the provision of effective IT. We have strong relationships with our clients that are founded on collaboration and professional delivery. I am confident that bringing
together CITS with Capita IT Services will mean that we are able to offer even more comprehensive solutions to all our clients and realise our full combined potential in the market.'

CITS has circa 440 employees across a number of locations in the UK, including 190 in Scotland.

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