19 November 2018 | Herpreet Kaur Grewal
Mitie has sold its social housing arm for a consideration of up to £35 million in cash.
This will be paid to Mitie via an upfront payment of £22.5 million at completion, subject to a completion accounts adjustment mechanism, and a further £12.5 million in deferred consideration payable over a period of two years post-completion upon the achievement of certain performance milestones.
Most of the proceeds will be used to strengthen Mitie's 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 Property Management (MPM) is a top-five player in the social housing market and on joining Mears, will become part of the largest provider for social housing repairs and maintenance in the UK.
MPM has been caring for residents' homes for over 25 years providing services to over 30 social housing providers.
Phil Bentley, Mitie's chief executive officer, said: "Mitie's strategy is to focus on its core businesses and core clients, where service delivery and margin can be enhanced by the use of technology to deliver the critical environment reliability and cost efficiency that our clients increasingly demand from their "Connected Workspace".
"MPM is a specialist provider of repairs and maintenance services to the social housing sector. The sale of MPM to Mears will allow Mitie to continue to focus and build scale in its core businesses."