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Serco bags discount on purchase of Carillion healthcare contracts

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Serco has shaved almost £20m off the price of 15 healthcare contracts it is taking over from failed contractor Carillion after revising the sale agreement in the wake of the company’s collapse.

The contracts, which are spread across 50 NHS sites, will now be transferred to Serco for £29.7m, having been worth £47.7m in December when the deal was first signed.

Serco said on Wednesday that it had signed a new purchase agreement with the special managers overseeing Carillion’s liquidation, with the lower price reflecting the fact that Serco now thinks the contracts will require “additional working capital investment”.

As a result of Carillion’s liquidation, Serco said it was forced to re-evaluate “potential liabilities, indemnities, warranties” associated with the contracts, making them less valuable.

Just under 1,500 employees work on the contracts being acquired under the deal.

Serco’s existing health operations already generate revenue of more than £350m, employ over 8,000 people, and provide services to organisations such as St Barts, England’s largest NHS Trust, and the Prince of Wales Hospital in Hong Kong.

In December, Serco’s chief executive Rupert Soames said the contracts should add £90m of revenue and £8m of profits to the business in the coming years, as well as significant potential for future income.

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