MITIE acquires five of its start-ups for £14.6 million

Outsourcing company MITIE has agreed to acquire the remaining shareholdings of four start-up businesses, and the majority of a fifth, which had been backed by the outsourcing company's shared-equity model.

The FTSE 250 company will pay a total of £4.6 million for shareholdings in the early-stage companies that were launched with the company’s support during the past five to six years.

Under the ‘MITIE model’, entrepreneurs from both the private and public sectors who want to create a business in the support services sector can apply for financial support from the company.

MITIE takes a minimum stake of 51 per cent in each new venture, and holds first rights to purchase the business, while the business is developed. MITIE claims to have invested in the management teams of more than 80 companies over the past two decades using the model.

The group will purchase minority shareholdings of five MITIE subsidiary companies, which are MITIE Cleaning Services, MITIE Engineering Maintenance (Caledonia), MITIE Landscapes, MITIE Property Services and MITIE Transport Services.

MITIE will own 100 per cent of the issued share capital of the companies, with the exception of MITIE Landscapes of which 89 per cent will be acquired on completion of the deal.

According to a statement, the total maximum consideration for all five purchases is £14.6 million, of which £2 million will be paid in cash and the remaining £12.6 million through the issuing of new ordinary shares.

MITIE chief executive Ruby McGregor-Smith says, ‘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.’

The company launched a £10 million Entrepreneurial Fund in January this year attract more entrepreneurs to the model.]

Todd Cardy

Todd Cardy

Todd was Editor of between 2010 and 2011 as well as being responsible for publishing our digital and printed magazines focusing on private equity and venture capital.

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Early Stage Funding