Purchase of shares in subsidi

RNS Number : 2384C

MITIE Group PLC

28 August 2008

 



Purchase of shares in MITIE subsidiary companies

MITIE announces that it has today agreed to purchase certain minority shareholdings of seven MITIE subsidiary companies: MITIE Catering Services Limited ('MCSL'); MITIE Interiors Limited ('MIL'); MITIE Managed Services (South-West & Wales) Limited ('MMSSWWL'); MITIE McCartney Fire Protection Limited ('MMFPL'); MITIE Property Services (Eastern) Limited ('MPSEL'); MITIE Services (Retail) Limited ('MSRL') and MITIE Technology & Infrastructure Limited ('MTIL') in accordance with the respective articles of association and shareholders' agreements.  

The total maximum consideration for all seven purchases amounts to £13,276,091.63, being satisfied as to £910,374.22 in cash and as to the remaining £9,950,567.81 by the issue of 4,548,831 new ordinary shares of 2.5p each in MITIE (the 'New MITIE Shares'), valued at 218.75p per share, being the closing market price per MITIE share on 14 August 2008. The issue of the New MITIE Shares is expected to take place by 30 September 2008. The balance of £2,415,149.60 of the consideration is deferred and will be paid in New MITIE Shares by 30 September 2010 subject to the attainment of specified profit targets by the relevant companies in the financial years to 31 March 2010.  

As a result of these acquisitions, MITIE will own: 100% of the issued share capital of MCSL; 100% of MIL; 100% of MMSSWWL; 98.75% of MMFPL; 100% of MPSEL; 83.28% of MSRL and 100% of MTIL.

Commenting on today's announcement, MITIE's Chief Executive, Ruby McGregor-Smith, said 'MITIE has a great track record of attracting the best talent. How we motivate and incentivise our people is a key part of our strategy and equity continues to be a differentiator.'

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

• MITIE Catering Services Limited ('MCSL') - 48.89% of the issued share capital, comprising 244,455 B ordinary shares of £1.00 each, for a consideration of £1,752,742.35. Such consideration will be satisfied as to £269,306.72 in cash and as to the remaining £1,483,435.63 by the issue of 678,142 New MITIE Shares.  

MCSL provides catering services to industrial and commercial clients.  The revenue, profit before tax and net assets of MCSL for the year ended 31 March 2008 were £12.49m, £1.02m and £1.54m respectively.

• MITIE Interiors Limited ('MIL') - 46.00% of the issued share capital, comprising 184,000 B ordinary shares of £1.00 each, for a consideration of £5,646,960.00. Such consideration will be satisfied as to £179,008.50 in cash and £3,209,167.50 by the issue of 1,467,048 New MITIE Shares. The balance of £2,258,784.00 of the consideration is deferred; half of which will be paid in New MITIE Shares by 30 September 2009 subject to the attainment of certain profit targets by MIL for the year ending 31 March 2009 and the remainder will be paid in New MITIE Shares by 30 September 2010 subject to the attainment of certain profit targets by MIL for the year ending 31 March 2010.

MIL provides fit out and refurbishment of commercial and industrial property in the UK. The revenue, profit before tax and net assets of MIL for the year ended 31 March 2008 were £48.34m, £2.53m and £3.34m respectively.

• MITIE Managed Services (South-West & Wales) Limited ('MMSSWWL') - 31.07% of the issued share capital, comprising 87,000 B ordinary shares of £1.00 each, for a consideration of £801,270.00. Such consideration will be satisfied as to £94,602.50 in cash and as to the remaining £706,667.50 by the issue of 323,048 New MITIE Shares.  

MMSSWWL provides and manages business support services. The revenue, profit before tax and net assets of MMSSWWL for the year ended 31 March 2008 were £6.37m, £0.77m and £0.98m respectively.

• MITIE McCartney Fire Protection Limited ('MMFPL') - 2.48% of the issued share capital, comprising 4,111 ordinary shares of £1.00 each, for a consideration of £470,627.28. Such consideration will be satisfied as to £28,804.78 in cash and as to the remaining £441,822.50 by the issue of 201,976 New MITIE Shares.

MMFPL provides passive fire protection throughout the UK. Per the latest draft of the financial statements, the revenue, profit before tax and net assets of MMFPL for the year ended 31 March 2008 were £9.80m, £1.55m and £5.06m respectively.

• MITIE Property Services (Eastern) Limited ('MPSEL') - 32.00% of the issued share capital, comprising 64,000 B ordinary shares of £1.00 each, for a consideration of £1,034,240.00. Such consideration will be satisfied as to £53,210.69 in cash and £877,605.31 by the issue of 401,191 New MITIE Shares. The balance of £103,424.00 of the consideration is deferred and will be paid in New MITIE Shares by 30 September 2009 subject to the attainment of certain profit targets by MPSEL for the year ending 31 March 2009.

MPSEL provides painting and building maintenance contracting. Per the latest draft of the financial statements, the revenue, profit before tax and net assets of MPSEL for the year ended 31 March 2008 were £11.99m, £0.85m and £1.44m respectively.

• MITIE Services (Retail) Limited ('MSRL') - 25.08% of the issued share capital, comprising 125,400 B ordinary shares of £1.00 each, for a consideration of £3,305,544.00. Such consideration will be satisfied as to £262,234.94 in cash and as to the remaining £3,043,309.06 by the issue of 1,391,227 New MITIE Shares.  

MSRL provides cleaning services to retail customers.  The revenue, profit before tax and net assets of MSRL for the year ended 31 March 2008 were £38.12m, £2.15m and £3.33m respectively.

• MITIE Technology & Infrastructure Limited ('MTIL') - 2.39% of the issued share capital, comprising 4,300 B ordinary shares of £1.00 each, for a consideration of £264,708.00. Such consideration will be satisfied as to £23,206.09 in cash and as to the remaining £188,560.31 by the issue of 86,199 New MITIE Shares. The balance of £52,941.60 of the consideration is deferred and will be paid in New MITIE Shares by 30 September 2009 subject to the attainment of certain profit targets by MTIL for the year ending 31 March 2009.

MTIL provides the installation of electrical and mechanical services in commercial and industrial premises, predominantly within the telecommunications sector.  The revenue, profit before tax and net assets of MTIL for the year ended 31 March 2008 were £27.66m, £2.67m and £2.92m respectively.

Application will be made shortly to the UK Listing Authority and the London Stock Exchange (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 will rank pari passu with existing ordinary MITIE Shares, save that they have a trading restriction applied until 28 August 2010 with the exception of the MITIE Shares issued in respect of MMFPL which will have a trading restriction applied until 28 August 2009. It is expected that admission of the New MITIE Shares to the Official List will become effective on 4 September 2008.

Purchase of subsidiary company shares for cash consideration

MITIE further announces that it has agreed to purchase certain minority shareholdings of four MITIE subsidiary companies for cash consideration: MITIE Document Solutions Limited, MITIE Air Conditioning (Midlands) Limited and MITIE Air Conditioning (London) Limited.

Deferred Consideration in respect of the purchase of subsidiary company shares in August 07

Pursuant to the announcement made on 23 August 2007 and the attainment of certain profit targets by subsidiary companies, MITIE will pay a deferred amount of consideration totalling £519,876.50 in respect of the purchase last year of the minority shareholdings in MITIE Technology & Infrastructure Limited. Such consideration will be satisfied as to £10.56 in cash and by the issue of 237,653 New MITIE Shares.

Application will be made shortly to the UK Listing Authority and the LSE for these New MITIE Shares to be admitted to the Official List and to trading on the LSE. These New MITIE Shares will rank pari passu with the existing ordinary shares, save that they cannot be transferred for a period of 1 year from 28 August 2008. It is expected that admission of these New MITIE Shares to the Official List will become effective on 4 September 2008.

Notes to editors

For further information, please contact: 

John Telling, Head of Corporate Affairs
T:  020 7034 7304        M: 07979 701006

David Revis, Investor Relations Manager 

T: 020 7034 7306         M: 07979 702465

 

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