Capita is to acquire Constructiononline for £35 million, the Department for Business, Innovation and Skills (BIS) has confirmed.

Constructionline is one of the UK's procurement and supply chain management services and was set up by BIS (formerly the Department of the Environment, Transport and the Regions) initially for public sector contracts. It aims to reduce the annual cost for construction industry buyers and suppliers, particularly SMEs, of repeatedly providing pre tender information. Capita was awarded the original concession to run Constructionline, by the Government, in 1998 and was successful in the subsequent re-tenders.

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Capita will be able to further invest and commercialise Constructionline, delivering enhanced services to both the private and public sectors. Capita will extend the range of value added procurement services it offers contractors and suppliers. Initially focusing on construction, it will also develop similar services for other industries.

Andy Parker, Capita chief executive, said: "Capita has run Constructionline successfully for more than 16 years, building one of the largest buyer and supplier service organisations of its kind, helping buyers achieve compliance and returning regular income to BIS and the tax payer. But under public sector ownership, there have, understandably, been a number of constraints to the service reaching its full potential."

(CD)