Marlborough put itself up for sale in December 2004 following a series of warnings about its business performance and the resignation of non-executive chairman Paul Fullagar. It has suffered financially over the last year, and yesterday it revealed it made a pre-tax loss of GBP 11.0m ($21.2m) in 2004 compared to a GBP 0.9m ($1.7m) profit the previous year. During the year the company cut its workforce by 70, and closed down three loss-making operations.
It has three remaining divisions, the largest of which is its life and pensions business that provides outsourcing services to life assurers in the UK. Its second largest business is its mortgage division, which provides software and implementation services to customers in the UK and Canada. The company also has a subsidiary that supplies portal services to independent financial advisers in the UK. Its customers include Sun Life of Canada, Royal Liver, Bradford & Bingley, Northern Rock, Egg, and Birmingham Midshires.
Marlborough’s CEO Mike O’Leary said lack of financial scale had held it back from winning new business in the rapidly expanding life and pensions outsourcing market.
The Marlborough board has recommended the Vertex offer, and shareholders representing 58.5% of the issued share capital have undertaken to vote for the proposal.
Vertex was set up in 1996 and acquired Capgemini’s business process outsourcing practice in February 2001 with revenue of GBP 36m ($69.5m), and signed an exclusive five-year partnership with Capgemini to cooperate on large business and IT services outsourcing contracts. Capgemini also acquired an initial 12.5% stake in Vertex as part of the partnership, which it increased to 14.5% before selling it back to United Utilities in November 2004 for GBP 47.5m ($91.7m).
Vertex is focused on customer management for the public sector and the commercial and utilities sectors, and its largest contracts are with its parent company and Powergen. It has 8,000 employees, about 6,000 of whom are based in over 30 locations in the UK, 1,500 in India, with the rest in North America.
