Purchase of shares in subsidi

RNS Number : 6489X

MITIE Group PLC

18 August 2009

MITIE Group PLC

Purchase of shares in MITIE subsidiary companies

MITIE announces that it has today agreed to purchase certain minority shareholdings of six MITIE subsidiary companies: MITIE Cleaning Services Limited (‘MCSL’); MITIE Engineering Maintenance (North) Limited (‘MEMNL’); MITIE Engineering Projects Limited (‘MEPL’); MITIE Engineering Services (Midlands) Limited (‘MESML’); MITIE Transport Services Limited (‘MTSL’); and MITIE McCartney Fire Protection Limited(‘MMFPL’) in accordance with the respective articles of association and shareholders’ agreements.

The total maximum consideration for all six purchases amounts to £21,079,927.32, being satisfied as to £1,144,485.21 in cash and as to the remaining £19,935,442.11 by the issue of 8,385,044 new ordinary shares of 2.5p each in MITIE (the “New MITIE Shares”), valued at 237.75p per share, being the closing market price per MITIE share on 24 July 2009. The issue of the New MITIE Shares is expected to take place by 30 August 2009.

As a result of these acquisitions, MITIE will own: 99.18% of the issued share capital of MCSL; 90.51% of MEMNL; 85.20% of MEPL; 82.60% of MESML; 96.95% of MTSL; and 100.00% of MMFPL.

MITIE will also issue shares as deferred consideration in respect of share purchase agreements signed in 2008. The total maximum consideration in respect of the deferred consideration amounts to £1,285,757.60, being satisfied as to £34.07 in cash and as to the remaining £1,285,723.53 by the issue of 540,788 additional new ordinary shares of 2.5p each in MITIE (the “Additional New MITIE Shares”), valued at 237.75p per share, being the closing market price per share on 24 July 2009. The issue of the Additional New MITIE Shares is expected to take place by 30 August 2009.

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

· MITIE Cleaning Services Limited (‘MCSL’) – 3.25% of the issued share capital, comprising 466,000 B ordinary shares of £1.00 each, for a consideration of £5,298,420.00. Such consideration will be satisfied as to £606,668.63 in cash and as to the remaining £4,691,751.37 by the issue of 1,973,397 New MITIE Shares.

MCSL provides cleaning services to industrial and commercial clients. MCSL is a holding company and owns 100% of the equity in MITIE Cleaning & Environmental Services Limited (“MCESL”), a trading company. MCSL does not have any revenue, its profit before tax and net assets for the year ended 31 March 2009 were £7.0m and £14.6m respectively. MCSL does not produce consolidated accounts. £6.9m of the profit before tax in MCSL is dividend income received from MCESL. The revenue, profit before tax and net assets of MECSL for the year ended 31 March 2009 were £199.1m, £13.3m and £10.0m respectively.

· MITIE Engineering Maintenance (North) Limited (‘MEMNL’) – 37.94% of the issued share capital, comprising 132,800 B ordinary shares of £1.00 each, for a consideration of £5,442,144.00. Such consideration will be satisfied as to £159,709.89 in cash and £5,282,434.11 by the issue of 2,221,844 New MITIE Shares.

MEMNL provides management and engineering maintenance services. The revenue, profit before tax and net assets of MEMNL for the year ended 31 March 2009 were £28.3m, £2.3m and £2.8m respectively.

· MITIE Engineering Projects Limited (‘MEPL’) – 22.20% of the issued share capital, comprising 22,200 B ordinary shares of £1.00 each, for a consideration of £1,711,620.00. Such consideration will be satisfied as to £81,720.12 in cash and £1,629,899.88 by the issue of 685,552 New MITIE Shares.

MEPL provides installation of electrical and mechanical services predominantly in the social housing sector. The revenue, profit before tax and net assets of MEPL for the year ended 31 March 2009 were £7.3m, £0.8m and £2.1m respectively.

· MITIE Engineering Services (Midlands) Limited (‘MESML’) – 26.10% of the issued share capital, comprising 39,150 B ordinary shares of £1.00 each, for a consideration of £1,609,065.00. Such consideration will be satisfied as to £67,367.99 in cash and £1,541,697.01 by the issue of 648,453 New MITIE Shares.

MESML provides the installation of electrical and mechanical services in the domestic, commercial and industrial premises. The revenue, profit before tax and net assets of MESML for the year ended 31 March 2009 were £17.5m, £0.9m and £1.1m respectively.

· MITIE Transport Services Limited (‘MTSL’) – 10.87% of the issued share capital, comprising 146,800 C ordinary shares of £1.00 each, for a consideration of £6,799,776.00. Such consideration will be satisfied as to £198,716.20 in cash and £6,601,059.80 by the issue of 2,776,471 New MITIE Shares.

MITIE has also entered into an agreement to purchase 80% of Ruby McGregor-Smith’s (a Director of MITIE) holding in MTSL. Ruby McGregor-Smith served notice on MITIE to sell 3,600 C ordinary shares of £1.00 each at the same time as other MTSL shareholders, for a total consideration of £166,752.00. This equates to 0.27% of MTSL’s issued share capital. Under the Company’s Act 2006, MITIE may not complete this transaction until it has been approved by shareholders at a general meeting for which notice will be given shortly. By sections 190 and 191 Company’s Act 2006 a company may not enter into a transaction with one of its directors whereby the company is to acquire a non-cash asset of a value of more that £100,000 from that director 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 Ruby McGregor-Smith will terminate without recourse. Subject to this approval, the consideration will be satisfied as to £1.28 in cash and £166,750.72 by the issue of 70,137 new ordinary shares, such issue to take place by 30 September.

MTSL provides cleaning and associated services to clients in the transport sector. The revenue, profit before tax and net assets of MTSL for the year ended 31 March 2009 were £41.3m, £4.1m and £5.9m respectively.

· MITIE McCartney Fire Protection Limited (‘MMFPL’) – 2.48% of the issued share capital, comprising 2,056 B ordinary shares of £1.00 each, for a consideration of £218,902.32. Such consideration will be satisfied as to £30,302.38 in cash and £188,599.94 by the issue of 79,327 New MITIE Shares.

MMFPL provides passive fire protection throughout the UK. The revenue, profit before tax and net assets of MMFPL for the year ended 31 March 2009 were £7.6m, £0.7m and £5.6m 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 18 August 2011 with the exception of the MITIE Shares issued in respect of MMFPL which will have no trading restriction applied. It is expected that admission of the New MITIE Shares to the Official List will become effective on 24 August 2009. In addition, the selling shareholders of each of the relevant subsidiary companies give MITIE certain warranties and assurances relating to the past and future performance. 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.

A separate application will be made to the UK Listing Authority and the LSE in respect of the New MITIE Shares due to Ruby McGregor-Smith. This application will be made should shareholder approval be granted at the general meeting of the Company.

Deferred Consideration in respect of the purchase of subsidiary company shares in August 2008

Pursuant to the announcement made on 28 August 2008 and the attainment of certain profit targets by subsidiary companies, MITIE will pay a deferred amount of consideration totalling £1,285,757.60 in respect of the purchase last year of the minority shareholdings in MITIE Interiors Limited, MITIE Property Services (Eastern) Limited and MITIE Technology & Infrastructure Limited. Such consideration will be satisfied as to £34.07 in cash and £1,285,723.53 by the issue of 540,788 Additional New MITIE Shares.

Application will be made shortly to the UK Listing Authority and the LSE for these Additional New MITIE Shares to be admitted to the Official List and to trading on the LSE. These Additional New MITIE Shares will rank pari passu with the existing ordinary shares, save that they have a trading restriction applied until 18 August 2010. It is expected that admission of these Additional New MITIE Shares to the Official List will become effective on 24 August 2009.

Notes to editors

For further information, please contact:

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

This information is provided by RNS

The company news service from the London Stock Exchange

END

ACQFGGMRKRMGLZM