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DELOITTE & TOUCHE SET TO FLOAT CSL

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CSL, one of the UK's leading local government outsourcing firms, is being prepared for flotation on the stock excha...
CSL, one of the UK's leading local government outsourcing firms, is being prepared for flotation on the stock exchange.

The company is owned by Deloitte & Touche, the accountancy and consultancy giant. But it is now clear CSL is poised to go it alone in the near future.

The firm recently introduced its own pension scheme, separate from Deloitte & Touche's superannuation arrangements, a strong indication it is being groomed for a stock market flotation.

CSL began life as CIPFA Services Ltd, before it was subject to a management buy-out in 1989. It was acquired by Deloitte & Touche (then Touche Ross & Co) in 1993 to become the firm's outsourcing arm.

In recent years, numerous efforts from rival outsourcing companies to buy CSL have been rejected and the firm has grown to become a major player in the IT and financial services market.

Last year, analyst Romtec named CSL as the number one company in the local government managed services market, commanding 36% of the market by revenue from local government contracts at the end of 1998 (LGC, 30 April 1999).

Flotation would see CSL follow in the footsteps of two of its major competitors, Capita and ITnet. Capita, the subject of an earlier MBO from CIPFA in 1987, floated in 1989 and entered the FTSE 100 earlier this year (LGC, 24 March). ITnet, which was spun out of Cadbury Schweppes, floated in 1998.

Both firms, and Capita in particular, have since used their quoted status to acquire a range of other businesses.

CSL has enjoyed mixed fortunes in the local government market in recent times. In common with other outsourcing companies, it has experienced severe difficulties with some of its revenues and benefits contracts, notably at Taunton Deane BC with which it parted company acrimoniously this year (LGC, 31 March and 12 May).

Conversely, it is in the running, along with BT, for a£100m IT deal with City of Edinburgh Council.

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