1 October 2018 | Marino Donati
Mitie is to sell its pest control business to Rentokil for £40 million.
The company 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 customers.
Mitie Pest provides commercial pest control services including technical inspection and routine preventative services, and pest proofing and clearance works. It has around 375 employees and more than 3,000 customers in the UK and Ireland.
Andy Halsall, Mitie Pest interim managing director, will continue his role for an interim period, to ensure a smooth transition of the business from Mitie to Rentokil and continuity of service.
Mitie Group plc will sell the entire issued share capital of Mitie Pest Control Limited to Rentokil Initial plc. The group said that most of the proceeds would be used to strengthen the balance sheet and accelerate partial repayment of the deficit under the group's defined benefit pension scheme, and the balance will be reinvested in core businesses.
Mitie Pest reported profits before tax of £2 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. It forecasts £2.4 million for the six months to 30 September 2018.
Mitie said Rentokil's expertise would enhance the range of services that it provides to its integrated facilities management customers.
Phil Bentley, Mitie's CEO, said: "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, while ensuring service quality and innovation are maintained for our clients."