Interserve's Support Services division merge with Mitie to create the UK's leading Facilities Management business

Interserve's Support Services division merge with Mitie to create the UK's leading Facilities Management businessInterserve Group Limited welcomes the announcement from Mitie PLC of the proposed merger of Interserve Support Services with Mitie for a combined consideration of £271m, comprising £120m in cash and a 23.4% shareholding in Mitie to be held by or on behalf of Interserve’s shareholders. Interserve Support Services is comprised of the company’s facilities management operations in the UK and overseas across both public and private sectors.

Completion of the transaction is subject to certain conditions, including approval from Mitie’s shareholders. Should these conditions be satisfied within the expected timeframe, the merger of Interserve Support Services is expected to complete by the end of this year. Mitie will also be engaging with the CMA as part of the merger process.

Interserve and Mitie are both leaders of the UK FM outsourcing industry. The combined organisation will be uniquely placed in the UK market to deliver best in class, market leading services to customers. Interserve’s expertise in delivering frontline critical public services together with Mitie’s pedigree in delivering technical and business services to the private sector will enable us to share best practice, innovation and technology to the benefit of our combined extensive customer portfolio.

The combined organisation will be evenly balanced between the public and private sectors and will be the largest facilities management company in the UK, employing over 77,500 people.

The Board of Interserve Group Limited believes that the proposed transaction creates a larger and stronger UK FM business and is highly attractive to its stakeholders, including its employees, customers, partners and shareholders.

Following completion of the transaction, Interserve Group Limited will continue to focus on delivering its business plans for its three remaining divisions, Construction, Interserve Construction Limited and Equipment Services (RMD Kwikform) and Citizen Services. Alan Lovell will continue to lead Interserve Group Limited as Chairman, supported by Mark Morris, Executive Director and Chief Financial Officer.

Alan Lovell, Chairman of Interserve Group Limited, said:

“The proposed combination of Interserve Support Services with Mitie will create the UK’s leading facilities management company, with strong prospects in both the public and private sectors providing significant opportunities to employees, customers, and shareholders alike.

“The transaction, which is consistent with our stated strategy of realising value for our shareholders, will reduce the Group’s debts, enable a paydown to our shareholders and stabilise the Group’s financial position through a retention of a proportion of the proceeds.

“It will leave Interserve as a focused Group executing clear business plans in Interserve Construction Limited and RMD Kwikform, as well as our Citizen Services portfolio of businesses. Interserve Group Limited see significant opportunities for these businesses in their respective markets, which we will continue to pursue with a high level of discipline.”

Lazard is acting as sole financial advisor to Interserve Group Limited in respect of the transaction, and Slaughter and May is acting as legal counsel.

Interserve's Support Services division merge with Mitie to create the UK's leading Facilities Management business