Tribal sells health business

Tribal has announced that it is to sell its government and health businesses to Capita Group for £15.9m.

Tribal boasts on its website that it is "transforming the world’s public services" through its consultancy, technology and service delivery work.

It won contracts from NHS commissioners and providers to deliver "world class commissioning" and change management support, and hoped to win new business from the Liberating the NHS reforms.

However, in a statement issued this morning to comply with the City’s code on takeovers and mergers, the company announced that it was to sell its government and health businesses to Capita for £13.4m in cash and a further £2.5m if certain conditions are met.

The statement says that the two businesses made a loss of £2.7m in the year to the end of December 2010, despite having assets of £71.7m and a turnover of £70.8m.

It also indicates that Tribal wants to use the money raised by the sale to reduce its debt and refocus on its education and training businesses, where it indicates further cost savings will be made.

Former NHS IT boss Matthew Swindells was managing director for health at Tribal for two years, before leaving for the US health IT giant Cerner last July. His post was taken by Kingsley Manning, former head of the health consultancy Newchurch.

Tribal is the latest of a number of consultancies to pull out of the provision of information and consultancy services to the NHS.

The coalition government announced the end of the WCC agenda when it announced plans to abolish primary care groups and replace them with GP commissioning consortia in the ‘Liberating the NHS’ white paper.

Unions have expressed concern about private firms stepping in to undertake commissioning functions.

However, the Policy Exchange think-tank warned recently that the government would need to stick by its reforms and make a gesture of formal support to the sector if it wanted this to happen.

Capita said the acquisition, which must be approved by Tribal shareholders, will put it in a strong position to win reform business.

“The government consulting acquisition will strengthen our proposition for service delivery and technical support across central and local government, including policing, justice and housing,” said Capita chief executive Paul Pindar.

“In addition, Tribal’s health expertise fits with our strategic goal to provide support services to GP commissioning consortia.”