Mitie Group plc (LSE: MTO.L)(“Mitie” or the “Group”) today announces the sale of the entire issued share capital of Mitie Pest Control Limited (“Mitie Pest” or the “Company”), to Rentokil Initial plc (LSE: RTO.L)(“Rentokil”) for a consideration of £40 million in cash (on a debt free, cash free basis).
The consideration of £40 million will be paid in cash at completion, subject to any adjustment for final completion accounts. The majority of the proceeds will be used to strengthen the balance sheet and accelerate partial repayment of the deficit under the Group’s defined benefit pension scheme, with the balance being reinvested in core businesses.
Mitie Pest reported profits before tax of £2.0 million for the financial year ended 31 March 2018. Earnings before interest and tax, adjusted to exclude non-recurring items and the recharge of Mitie central service costs, were £3.2 million over the same period. At a balance sheet date of 31 March 2018, Mitie Pest had gross assets of £8.7 million. The Company continues to grow and the forecast earnings before interest and tax, adjusted to exclude non-recurring items and the recharge of Mitie central service costs for the six months ended 30 September 2018 are expected to be £2.4 million.
Phil Bentley, Chief Executive Officer, Mitie, commented:
“Historically, Mitie has worked with preferred partners to deliver certain specialist services for our clients. By teaming up with Rentokil Initial – the UK’s largest provider of Pest services – we free up funds to invest in our core businesses, whilst ensuring service quality and innovation are maintained for our clients.”
Mitie Pest’s Interim Managing Director Andy Halsall will continue his role with the Company for an interim period, to ensure a smooth transition of the business from Mitie to Rentokil and ensure continuity of service for Mitie’s customers.
Mitie has separately entered into a preferred supplier partnership with Rentokil, covering a range of services (including pest services) provided as part of an integrated facilities management offering to Mitie’s wide range of customers. Rentokil’s expertise will enhance the range of services that Mitie provides to its integrated facilities management customers.
The sale of Mitie Pest constitutes a Class 2 transaction for the purposes of the UK Financial Conduct Authority’s Listing Rules.