Interserve sells FM arm to Mitie for £271m

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.”