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11 February 2015

Capita preferred bidder for Fera joint venture

Capita plc (Capita) has been selected, following a competitive procurement process, to form a joint venture with the Department for Environment, Food and Rural Affairs (Defra) to operate the Food and Environment Research Agency (Fera).

As part of the agreement, the joint venture has secured a long term service agreement for up to 10 years, to deliver services for Defra, its network and the Health and Safety Executive (HSE), and a 10 year supplier framework through which scientific services can be bought directly by other crown bodies.

In support of the Government’s programme of commercialising certain public assets, Capita will acquire a 75% stake in the joint venture for £20m in cash and will use its infrastructure and expertise to enhance Fera’s ability to deliver scientific benefit to the public and return value to the taxpayer.  Forecast commercial growth against specific, targeted markets is expected to enable the joint venture to achieve at least £700m revenue over its first 10 years. Growth will be generated through existing agreements with the public sector, securing new public sector work and by further developing services to achieve greater penetration of the commercial market. Fera already generates annual turnover of around £40m.
   

Capita’s commercial know-how will complement the Fera team’s scientific expertise, helping it to grow the scientific capability it can offer existing and new customers. Working together, we will create a more efficient and improved organisation allowing scientists to focus on the science and its delivery.

Andy Parker

Chief executive, Capita plc

Fera provides scientific services to government and commercial customers, such as food retailers and manufacturers of crop protection products, in the UK and overseas, employing nearly 400 scientists at a site near York. It specialises in translating scientific knowledge into practical applications, such as helping to ensure food safety and quality ‘from farm to fork’, sustainable crop production, environmental management and conservation. It also plays a key role in the UK’s ability to respond to, and recover from, emergency situations affecting the food chain and rural economy.

Capita will establish an institute with Newcastle University to ensure strong linkage between Fera, academia and scientific research and development, driving innovation and creating a centre of excellence for UK scientific partnership and research. As a result of the joint venture and this partnership more than 50 new, highly specialist scientific roles will be created in York.

Capita chief executive, Andy Parker, said: “The excellent science being carried out by staff at Fera has not yet been able to reach its full commercial potential because of obvious limits on investment, recruitment and marketing.

“Capita’s commercial know-how will complement the Fera team’s scientific expertise, helping it to grow the scientific capability it can offer existing and new customers. Working together, we will create a more efficient and improved organisation allowing scientists to focus on the science and its delivery.

“Crucially, the additional capabilities of Capita and its partners, including Newcastle University, will enable the joint venture to drive commercial and government sector growth. This market is full of opportunity and we anticipate cumulative revenue to the joint venture to progress to at least £700m by year 10.

“The science services market is one we’ve been excited about for some time and we see this joint venture as laying the foundation for an additional growth market for Capita.” 

Find out more about Fera on their website

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