Mitie knocks £81m off Interserve FM purchase price

Mitie

November 05, 2020 – Mitie and Interserve have renegotiated the terms of the sale of the latter’s facilities management business to the tune if £81m.

Mitie announced in June 2020 that it had signed a sale and purchase agreement to acquire Interserve Facilities Management for £271m, comprising £120m in cash and the balance in Mitie shares – 358 million shares in the newly enlarged Mitie  representing approximately 23.4% of enlarged group share capital.

Now, though, it has been agreed that Interserve’s shareholders – institutions including Royal Bank of Scotland and HSBC who took over Interserve after its March 2019 administration – will only get 248 million Mitie shares along with their £120m cash. This values the transaction at £190m rather than the previous £271m and gives the banks that own Interserve 17.5% of Mitie instead of 23.4%.

Mitie shareholders get to vote on the deal at a general meeting on 23rd November 2020.

Phil Bentley, chief executive of Mitie, explained: “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 248 million shares.  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.”

Source:-https://www.theconstructionindex.co.uk/news/view/mitie-knocks-81m-off-interserve-fm-purchase-price

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