Acquisition

RNS Number : 5499M

MITIE Group PLC

17 August 2011

 



17 August 2011

MITIE Group PLC

 MITIE's entrepreneurial model rewards a further five employee management teams

MITIE, the strategic outsourcing and energy services company, announces today that it has purchased employee minority shareholdings of five of its successful 'MITIE Model' businesses.

MITIE is committed to backing British start-ups and as part of this, launched a £10 million Entrepreneurial Fund in January this year. In July, MITIE also joined a roster of leading companies as a founding sponsor of StartUp Britain, the Government-supported initiative to helping aspiring entrepreneurs in the UK.

MITIE, which stands for Management Incentive Through Investment Equity, has a long history of partnering with management teams to start up and grow businesses, having participated in over 80 successful start-ups using the 'MITIE model' in its 23-year history. 

Ruby McGregor-Smith, Chief Executive of MITIE, said:  "I am delighted with the progress of these five MITIE businesses which have contributed to the growth of the group.

"We see a significant opportunity for the MITIE model to support our aspirations for growth and we hope that more entrepreneurs will join us to grow similarly successful businesses."

Transaction details:

MITIE Group PLC (MITIE) today agreed to purchase certain minority shareholdings of five MITIE subsidiary companies: MITIE Cleaning Services Limited (MCSL), MITIE Engineering Maintenance (Caledonia) Limited (MEMCL), MITIE Landscapes Limited (MLL) MITIE Property Services (UK) Limited (MPSUKL) and MITIE Transport Services Limited (MTSL) in accordance with the respective articles of association and shareholders' agreements of those companies. 

The total maximum consideration for all five purchases amounts to £14.6m, being satisfied as to £2.0m in cash and as to the remaining £12.6m by the issue of 5,265,964 new ordinary shares of 2.5p each in MITIE (the 'New MITIE Shares'), valued at 238.7 pence per share, being the closing market price per MITIE share on 27 July 2011. 

As a result of these acquisitions, MITIE will own 100% of the issued share capital of all companies listed above, with the exception of MLL of which 89% of the issued share capital will be owned.

The shareholdings to be purchased, primarily held by certain of the employees and senior management of the relevant subsidiary companies, are detailed below:

·      MITIE Cleaning Services Limited (MCSL) - 0.81% of the issued share capital, comprising 116,500 B ordinary shares of £1.00 each, for a consideration of £2.2m.  The consideration will be satisfied by £0.3m in cash and £1.9m by the issue of 788,490 New MITIE Shares. 

·      MITIE Engineering Maintenance (Caledonia) Limited (MEMCL) - 5.60% of the issued share capital, comprising 14,000 B ordinary shares of £1.00 each, for a consideration of £0.03m.  The consideration will be satisfied by £0.01m in cash and £0.02m by the issue of 10,046 New MITIE Shares. 

·      MITIE Landscapes Limited (MLL) - 11.32% of the issued share capital, comprising 113,250 B ordinary shares of £1.00 each, for a consideration of £1.1m.  The consideration will be satisfied by £1.1m in cash.

·      MITIE Property Services (UK) Limited (MPSUKL) - 19.45% of the issued share capital, comprising 700,200 B ordinary shares of £1.00 each, for a consideration of £9.7m.  The consideration will be satisfied by £0.5m in cash and £9.2m by the issue of 3,839,958 New MITIE Shares. 

As part of the arrangements, MITIE has entered into an agreement to purchase shares held by Kenneth Robson (a relative of William Robson, a Director of MITIE) in MPSUKL.  Kenneth Robson served notice on MITIE to sell 40,000 B ordinary shares of £1.00 each in MPSUKL at the same time as other MPSUKL shareholders, for a total consideration of £0.5m.  This equates to 1.11% of MPSUKL's issued share capital.  Under the Companies Act 2006, MITIE may not complete this transaction until it has been approved by its shareholders at a general meeting for which notice will be given in due course.  Under sections 190 and 191 of the Companies Act 2006 a company may not enter into a transaction with one of its directors or a related party whereby the company is to acquire a non-cash asset of a value of more than £100,000 from that director or related party unless the transaction has been approved by the shareholders of the company, or is conditional on such approval being obtained.  In the event that shareholder approval is not obtained then the conditional share purchase agreement entered into between MITIE and Kenneth Robson will terminate without recourse.  Subject to this approval, the consideration will be satisfied as to £0.01m in cash and £0.5m by the issue of 227,482 New MITIE Shares, such issue to take place by 31 July 2012. 

A separate application will be made to the UK Listing Authority and the London Stock Exchange ('LSE') in respect of the New MITIE Shares due to Kenneth Robson.  This application will be made should shareholder approval be granted at the general meeting of the Company.

·      MITIE Transport Services Limited (MTSL) - 2.79% of the issued share capital, comprising 37,600 C ordinary shares of £1.00 each, of which 900 shares are held by Ruby McGregor-Smith, for a consideration of £1.6m.  The consideration will be satisfied by £0.1m in cash and £1.5m by the issue of 627,470 New MITIE Shares. 

In accordance with DTR 3.1.2R, the Company notifies that Ruby McGregor-Smith, a director of MITIE, will receive a total consideration of £38,106 of which £10,600 will be paid in cash and the remaining £27,506 will be satisfied in 11,523 New MITIE Shares, representing 0.003% of the issued share capital of MITIE.  Following the transaction, Ruby McGregor-Smith will hold an interest in 352,594 ordinary shares of 2.5p each in MITIE, representing 0.1% of the issued share capital of MITIE.  

The selling shareholders of each of the relevant subsidiary companies give MITIE certain warranties and, where appropriate, assurances relating to past and future performance.  Where applicable, the MITIE shares issued as consideration are held in safe custody and may be sold to meet any claims that MITIE may have in the future in relation to those warranties and assurances.

Application will be made shortly to the UK Listing Authority and the LSE for the relevant New MITIE Shares to be admitted to the Official List and to trading on the LSE.  The New MITIE Shares issued in respect of MCSL and MTSL will rank pari passu with existing ordinary MITIE Shares issued.  The New MITIE Shares issued in respect of MEMCL will rank pari passu with existing ordinary MITIE shares except that they will have a trading restriction applied until 17 August 2012.  The New MITIE Shares issued in respect of MPSUKL will rank pari passu with existing ordinary MITIE shares except they will have a trading restriction applied until 17 August 2013.   It is expected that admission of the New MITIE Shares to the Official List will become effective by the end of August 2011.

-ENDS-

For further information, contact:

MITIE
John Telling, Group Corporate Affairs Director	D: [phone] M: [phone] E: [e-mail]
Erica Lockhart Head of Investor Relations and External Affairs	D: [phone] M: [phone] E: [e-mail]

Notes for editors

What is MITIE?

We're the strategic outsourcing and energy services company. What does that mean in practice? We manage facilities, energy and properties for our clients across the UK and beyond.

We work with our clients in three ways; some take full advantage of our whole range of expertise, others may only need one aspect of what we do:

Strategy and consultancy

+ Facilities and energy management

+ Service delivery

Our strategic input can add value at the highest level by helping clients to manage their assets, while our practical management expertise can save customers money and reduce their carbon emissions.  We work with a vast number of clients in every industry across both the public and private sectors and deliver the broadest range of services that can be found in one place: from integrated facilities management to engineering maintenance to lifecycle energy management and much more.

There's a lot more to MITIE than you probably think. We're a big company with big ambitions - a leading FTSE 250 support services business, with more than 61,000 people, revenues of £1.9bn, and a reputation for being the best.

Visit us at www.mitie.com

Or find us on: 

 

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