*NEW RESEARCH*: Why is Capita breaking its 'rule book' to buy Xchanging?

Capita is upping the ante considerably with its planned £412m cash takeover of business process services (BPS) rival Xchanging – a deal almost three times larger in value than anything it has paid before (see Xchanging accepts Capita's £412m takeover offer).

Xchanging is a marked departure for Capita from its traditionally ‘conservative’ approach to M&A. This is a business still in turnaround, which represents a major play by Capita for scale and capability in the international insurance software and services market.

Xchanging is a very attractive proposition for Capita because of its incumbency at Lloyds of London, relationships with with tier one insurers, and its insurance software business Xuber. However unlike Capita's existing software businesses such as Academy or SIMS, which are dominant in their markets and unlikely to face major competitive threats, Xuber is a challenger. It will need constant feeding and investing in to compete with rivals like Guidewire, Accenture Duck Creek, NIIT and Sequel. Business process services (BPS) is of course, Capita's 'knitting'. And it's here that we see good synergies with the rest of the business. 

Subscribers to TechMarketView's BusinessProcessViews and Foundation Service research can read our analysis of what we see as the threats and opportunities for Capita and Xchanging in the pending merger, in our latest Analyst Views comment Why is Capita breaking its rule book to buy Xchanging?

If you're not yet a subscriber and would like to learn more, please contact Deb Seth (dseth@techmarketview.com), who will be happy to help.

Posted by: John O'Brien at 16:27

Tags: manda   bps   insurance  

Add a comment