Mitie has bought Interserve’s support services arm for £271m.
The deal, which will need approval from the Competition and Markets Authority (CMA) as well as Mitie’s shareholders, comprises £120m in cash and a 23.4% shareholding in Mitie to be held by Interserve’s shareholders.
The combined business, which will have an even spread of private and public sector clients, will be the largest facilities management company in the UK, employing over 77,500 people.
Following completion of the transaction, Interserve said it will focus on delivering its business plans for its three remaining divisions: construction, equipment services (RMD Kwikform) and citizen services. Alan Lovell will continue to lead Interserve Group Limited as chairman, supported by Mark Morris, executive director and chief financial officer.
Lovell said: “The proposed combination of Interserve Support Services with Mitie will create the UK’s leading facilities management company, with strong prospects in both the public and private sectors providing significant opportunities to employees, customers, and shareholders alike.
“The transaction, which is consistent with our stated strategy of realising value for our shareholders, will reduce the group’s debts, enable a paydown to our shareholders and stabilise the group’s financial position through a retention of a proportion of the proceeds.
“It will leave Interserve as a focused Group executing clear business plans in Interserve Construction Limited and RMD Kwikform, as well as our citizen services portfolio of businesses. Interserve Group Limited see significant opportunities for these businesses in their respective markets, which we will continue to pursue with a high level of discipline.”