Hospital manager Mitie to combine with Interserve arm in £271m deal
25 June 2020, 08:24
The new facilities management company will employ more than 77,500 people.
Two of the biggest private companies involved in the NHS’s special Nightingale Hospitals to treat Covid-19 patients have announced plans to combine forces.
Outsourcer Mitie said it would pay £271 million for a proposed acquisition of Interserve’s facilities management arm.
The deal would leave Interserve shareholders with a cheque for £120 million in cash, and a 23.4% stake in Mitie itself.
It would create what the companies say is the biggest facilities management expert in the UK, with more than 77,500 employees.
Mitie, meanwhile, will get a business with a strong presence in the government and defence sector, and said it will be able to save costs by combining the businesses.
Chief executive Phil Bentley said: “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.”
For Interserve, the deal gives it a chance to pay down its debts, give cash to its shareholders and stabilise its finances, its chairman, Alan Lovell, said.
Already a holder of government contracts, Mitie has won several more in the fight against coronavirus.
It has helped out in the Nightingale Hospitals and provided support to 11 drive-in coronavirus testing centres across the country.
The company has also picked up several deals to help supermarkets and online retailers through the tough period as they were forced to make sweeping changes to their supply chains.
Mitie revealed that revenue had grown by 4.2% in the year to the end of March, while pre-tax profit from continuing operations increased 73% to £48.4 million.
However, the start of this financial year has been tougher, with revenue dropping 12% and profit down by a fifth in the first two months.
Mr Bentley said: “We have 37,500 frontline workers keeping the UK safe and operational, whether in hospitals, supermarkets or sites of national security, or keeping offices, transport hubs or manufacturing plants open.
“Over the medium term, Covid-19 will present a different way of doing business and we are at the forefront of creating new solutions to enable our customers to operate safely and efficiently.”