MITIE REVISE FACILITIES MANAGEMENT DEAL

Mitie Group PLC one of the UK’s leading facilities management companies, announce that it has signed an agreement to amend the terms of the SPA so that it will acquire Interserve Facilities Management on a cash free and debt free basis for consideration of £120m in cash and approximately 248m shares in Mitie (representing approximately 17.5% of Enlarged Group share capital), valuing the transaction at approximately £190m based on Friday’s closing share price.
Mitie expects to publish a Circular seeking shareholder approval for the acquisition of Interserve Facilities Management later today. The shareholder vote is expected to be held at a general meeting of Mitie on 23 November 2020.
Mitie Group has signed an agreement to amend the terms of its acquisition of Interserve Facilities Management so that its shareholders enjoy a “greater share of the benefits of the transaction”. The combined business would have about 77,500 employees.
In June Mitie announced on 25 June 2020 that it had signed a sale and purchase agreement (“SPA”) to acquire Interserve’s Facility Management business on a cash free and debt free basis for a total consideration of approximately £271m [1] , comprising £120m in cash and approximately 358m shares in the newly enlarged Mitie ,representing approximately 23.4% of Enlarged Group share capital. Mitie signed a sale and purchase agreement (SPA) to acquire the Interserve division on a cash free and debt free basis for approximately £271m, comprising £120m in cash and approximately 358m shares in the newly enlarged Mitie.
In a rebalance said to reflect Mitie’s recent relative performance in winning new business, Mitie has now signed an agreement to amend the terms of the SPA so that it will acquire Interserve Facilities Management on a cash free and debt free basis for consideration of £120m in cash and approximately 248m shares in Mitie.
The share element of the agreement now represents about 17.5 per cent of the enlarged group share capital.
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 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. [2] 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 and Interserve Facilities Management’s customer portfolio and service capabilities are highly complementary and there is compelling strategic and commercial rationale for combining the businesses:
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

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