Mitie Group is to buy the facilities management arm of rival Interserve for £271m.
Interserve and Mitie are both leaders of the UK FM outsourcing industry. The combined organisation will be uniquely placed in the UK market to deliver best in class, market leading services to customers.
Interserve’s expertise in delivering frontline critical public services together with Mitie’s pedigree in delivering technical and business services to the private sector will enable them to share best practice, innovation and technology to the benefit of our combined extensive customer portfolio.
The combined organisation will be evenly balanced between the public and private sectors and will be the largest facilities management company in the UK, employing over 77,500 people.
The acquisition is expected to be completed in Q4 2020.
Mitie CEO Phil Bentley (pictured) commented, 'This will be a transformative acquisition, expanding the scale and footprint of our business to create the UK's largest facilities management company and accelerate the delivery of Mitie's long-term technology-led vision.
'The transaction will better balance our public and private sector divisions, driving greater returns from the investments we have made in technology and customer service over the past three years.'
Alan Lovell, Chairman of Interserve Group Limited, 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.”
Interserve’s Citizen Services division, comprising of Interserve Healthcare, Interserve Learning & Employment (ILE) and the Community Rehabilitation Companies that deliver rehabilitative services to low and medium risk offenders, are not included in the transaction.