Mitie Cuts Price For Interserve FM Acquisition

Mitie logoOutsourcing company Mitie has reduced the price it will pay for Interserve’s facilities management arm by nearly a third, to around £190 million under final terms for the deal.

Final deal term of the sale and purchase agreement to acquire Interserve on a cash free and debt free basis, comprising £120m in cash and 248m shares in the newly enlarged Mitie (17.5%), valuing the transaction at £190m based on Friday’s closing share price. A Circular seeking shareholder approval for the acquisition will be released ahead of a shareholder vote on 23 November 2020.



The acquisition will create the leading UK integrated facility management provider with market leading positions in Cleaning, Security and Technical Services, and market leading technology for a post-COVID world, with a balanced portfolio across public and private sectors. The Enlarged Group’s pro forma financial information indicate revenue before other items of £3.5bn with £120m total operating profit before other items, adjusted EBITDA pre-IFRS 16 of £150m and a net debt/EBITDA in the region of 1x. This stronger financial profile will enable the Group to keep investing in award winning technology, secure long-term financing, deliver sustainable free cash flow and resume payment of dividends.

The transaction is expected to complete in November with new shares issued in December 2020.

Phil Bentley, Chief Executive of Mitie, commented:

“Reassuringly both Mitie and Interserve Facilities Management have traded better than expected during the COVID crisis.

“However, Mitie, in particular, has been successful at renewing strategic contracts and winning new business during this period. Recognising this momentum, we have renegotiated the terms of the Interserve Facilities Management transaction, reducing the vendor’s consideration shares by 31% (110 million shares) to 248m shares (17.5% of the Enlarged Group), valuing the current consideration at £190m. Mitie’s existing shareholders will therefore hold a greater proportion (82.5%) of the Enlarged Group and enjoy a greater share of the benefits of the transaction.

“As we stated in June, the acquisition of Interserve Facilities Management accelerates the delivery of our technology-led strategy, expanding our scale and footprint to create the UK’s largest facilities management company. The combination of these two businesses will transform our competitive positioning, unlock significant growth opportunities for both our business and our 77,500 colleagues and strengthen our financial profile, better balancing our public and private sector divisions and driving greater returns from the investments we have made in technology, systems and customer service over the past three years.

“In short, we will achieve significantly more together than we could as two separate companies. This deal will create improved service for our customers, better opportunities for our people and, with the revised terms, accelerate value creation for our shareholders.”

Mitie commercial cleaner