Capita buys Constructionline for £35 million

Will Green is news editor of Supply Management
28 January 2015

The government has sold the Constructionline supplier database to Capita for £35 million.

Business minister Matthew Hancock said the sale would “cut red tape” to allow the service to “achieve its full potential”.

The database of 23,000 pre-qualified suppliers, which had revenues of £9.3 million and profits of £4.1 million in 2014, is used by 8,000 buyers.

Hancock said: “Construction benefits from the quality-assured, time-saving service of Constructionline and this sale aims to cut red tape further by freeing it of government ownership. Capita now has an exciting opportunity to expand its valued services to meet the needs of the construction industry and especially small and medium-sized businesses.

“Commercial ownership will enable the business, which has built up a strong reputation for reducing duplication and tender costs within the sector since its establishment in 1998, to achieve its full potential.”

Capita had been operating Constructionline under a concession agreement and last summer the government signalled its intention to sell it.

Capita said it would “invest and commercialise” the service and develop similar services for other industry sectors.

Andy Parker, chief executive at Capita, said: “In spite of its success to date, Constructionline currently provides its services to less than 15 per cent of the addressable suppliers in the construction industry, a market estimated to be worth more than £30 million annually.

“We believe that we can accelerate our penetration of both this and new market sectors and with a broader and more value added service we will be able to grow Constructionline rapidly. We therefore expect to increase revenues by 40 per cent over the next two years and achieve the company’s acquisitions target return on invested capital.”

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