The deal will be structured as a sale of the entire issued share capitals of Mitie Property Management Limited and MPS Housing Limited – a newly incorporated subsidiary of Mitie that has acquired the assets and undertaking of Mitie Property Services (UK) Limited.
The deal will be sealed at the end of this month and is dependent on a Mears share placing to raise cash and the completion of a TUPE consultation process with over 1,000 affected staff at Mitie.
The money comprises an initial payment of £22.5m, payable in cash at completion and a deferred consideration of up to £12.5m, payable in cash over a period of two years subject to the achievement of certain performance milestones.
Mitie Property Management delivers property repairs and maintenance services to over 30 social housing providers generating £128m revenue.
It carries out over 265,000 responsive repairs each year, along with 25,000 repairs for critical services delivered 365/24 hours a day to clients.
Mitie chief executive officer, Phil Bentley, 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. Mears is highly regarded in the social housing sector and has the specialist skills required to deliver to its client base.”
David Miles, chief executive of Mears, added: “I am delighted with the acquisition of Mitie Housing which will further strengthen Mears’ market leadership and contract profile in social housing.
“Given our strong operational platform and differentiated service delivery, together with our proven ability to turn around underperforming businesses, I am confident that we will deliver significant improvements to Mitie Housing’s contracts, customers, tenants and employees.”