The Cabinet Office has agreed to sell its 25% stake in Shared Service Connected Ltd (SSCL) to its partner in the joint venture Sopra Steria.
The company has announced that, in line with the original contract, SSCL will become a wholly owned subsidiary.
The value of the stake has been set at £82.3 million in cash.
Sopra Steria and the Cabinet Office set up the joint venture in 2013, since when it has become a major provider of support services to the public sector, including digital solutions for pensions administration, HR and payroll, finance and accounting, recruitment and resources, contact centres, data insight and procurement. Its customers have included the UK Government, the Ministry of Defence, Metropolitan Police and Construction Industry Training Board.
The company said the digital platforms have delivered savings in excess of £750m million for the public sector, and that SSCL has trebled its revenues from 2014-23.
In a statement to Parliament, Minister for the Cabinet Office Jeremy Quin said: "It had always been envisaged that the Cabinet Office might one day sell its stake. When the joint venture was established, Sopra Steria granted the Cabinet Office a put option exercisable in 2022 and 2023.
"The sale follows a review triggered by the approaching expiry of the put option. The Cabinet Office concluded that SSCL had been a successful joint venture delivering significant savings and value to the Government and the taxpayer, that the business was now well established and that it was time for it to move to the next stage in its evolution.
"The sale price was based on an independent valuation advisory report and exceeds the Cabinet Office’s retention value. As at 31 March 2023, the carrying value of the stake and related put option in the Cabinet Office accounts was some £48.2 million."
Consistency in transition
The joint venture currently employs around 3,000 people. Sopra Steria said the change to being subsidiary will not affect the management, employees or clients.
Its chief executive officer John Neilson said: “With the shared service model now successfully embedded and proven, the Cabinet Office can realise its plan to sell its stake in the joint venture, making a significant contribution to the public purse and allowing Sopra Steria to continue our investment in the SSCL business.
“This is recognition of the success of Sopra Steria and SSCL, our people and our plans to further enhance, innovate and grow our services on behalf of civil service users.”
Update: The Cabinet Office has indicated that £45 million from the sale will be re-invested in building digital capability across government.
