Capita moves on UK life & pensions business with Lincoln acquisition
26 July 2002 | 2612 views | 0
The Capita Group has acquired the life & pensions administration assets and infrastructure of Lincoln National Corporation's UK arm, Lincoln Financial Group, for approximately £6 million in cash.
Capita has also secured a contract worth £160 million over ten years to administer Lincoln's UK portfolio of around 900,000 life and pensions policies for half a million customers. The firm now plans to establish and grow a new business area, Capita Life & Pensions Services, taking it into a marketspace which has been most profitably mined by Marlborough Stirling.
Under terms of the transaction, Capita will pay a consideration of £5 million to be satisfied in cash in instalments in 2004 to 2006, following an initial £1 payment on completion of the deal. Further deferred sums will be paid up to 2007 linked to the growth of Capita's Life & Pensions business.
On 1 August 2002, approximately 500 of Lincoln's 700 staff will transfer to Capita and form the core of Capita's Life & Pensions Services business, which will operate from the existing 80,000 sq.ft Barnwood, Gloucester offices. The transfer includes a modern infrastructure and flexible in-house software and processing systems. All other aspects of Lincoln's operations will remain unaffected.
Rod Aldridge, executive chairman of The Capita Group, comments: "This partnership with Lincoln follows our acquisition earlier this year of City Financial Services, a unit trust administration provider, and enables us to turn our attention to significant growth opportunities within the rapidly expanding financial services third party administration market."