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The Capita Group plc, an outsourcing and professional services specialist, has strengthened its insurance operations after buying CMGL.

The acquired business, which provides claims and insurance management services, will become part of Capita’s London market operations following the £32 million deal.

Sovereign Capital Partners sold CMGL two years after backing a buy-out for the firm from Zurich Financial Services. This is the first exit from Sovereign’s £275 million Partnership II fund and represents an IRR of 260%.

The acquisition will build on Capita’s existing London markets business enabling the group to offer its clients end-to-end services in the live and run-off markets.

Capita’s insurance business administers more than £12 billion of insurers’ liability with its operations used by brokers, affinities, corporates, government and the London market. Capita Insurance Services has more than 4,400 employees across its UK network.

CMGL employs more than 440 staff in London, Cheltenham, Birmingham and at its overseas operations serving FTSE-quoted corporations, general insurers, Lloyd’s underwriters and London market companies.

In the year to December 2005, it recorded a £41.4 million turnover with an operating profit of £1.2 million.

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