Mitie Group (LSE:MTO) has agreed to be acquired by OCS Group International, an indirect subsidiary of OCS Group Topco, in a recommended all-cash takeover.
The offer is pitched at 221.6 pence per share, comprising 218.5p cash consideration and a 3.1p final dividend, which puts the deal at a 44% premium to Monday's closing price.
Mitie, the London-listed facilities management and support services provider, will combine with OCS, a privately held rival in the same sector, to create what the companies describe as one of the UK's largest private sector employers.
The Mitie board, advised by Ardea Partners and Peel Hunt, has concluded the terms are fair and reasonable, with Ardea Partners providing independent Rule 3 advice under the Takeover Code.
Chief executives from both sides framed the deal around scale and investment capacity, with the combined group positioned to expand technology and data-driven service delivery and to compete more effectively against larger international rivals.
OCS points to its track record integrating past acquisitions, including EMCOR (UK) and FES, as evidence it can absorb Mitie without disrupting service delivery.
The deal will proceed via a Scottish court-sanctioned scheme of arrangement under Part 26 of the Companies Act 2006, though OCS has reserved the right to switch to a takeover offer with Panel consent.
Completion is conditional on court sanction of the scheme, satisfaction of regulatory conditions detailed in the announcement, and the scheme becoming effective before the long stop date.
A scheme document, including notices of the court meeting and general meeting, is due within 28 days of the announcement.
The acquisition is expected to complete during the first quarter of 2027.
Mitie trading update
Mitie, also this morning, reported revenue of £1,406m for the three months to 30 June, up 10% from £1,282m a year earlier.
The technology-led facilities management, transformation and compliance company said this outpaced UK FM market growth of roughly 2-3%, with 4% organic growth and a further 6% from acquisitions, chiefly last year's purchase of Marlowe. Contract wins, extensions and renewals rose 33% to £1.6bn in total contract value, up from £1.2bn, while the bidding pipeline reached a record £32.5bn, with more than 70% due for award within 18 months.
"I am pleased we have made a good start to the year, maintaining double-digit growth despite the impact of contract losses last year", said chief executive Phil Bentley.
Business Services revenue jumped 23% to £829m, driven by prior-year security and hygiene wins and a strong Marlowe contribution, while Technical Services revenue fell 5% to £577m as the division continued lapping lost contracts, though new leadership has already secured roughly 70% of its full-year sales target.
Net debt rose to £477m from £450m at the end of the last financial year, reflecting a seasonal free cash outflow of just £13m, an improvement on £21m a year earlier.
Marlowe's cross-sell pipeline has grown roughly tenfold to about £700m in annual contract value since a July launch event for over 200 Mitie clients.
News Intelligence what this means for the company
OCS Group has secured Mitie's board recommendation for an all-cash takeover via scheme of arrangement, with completion targeted for Q1 2027 subject to court sanction and regulatory approvals. The deal combines two UK facilities management rivals to create scale and investment capacity for technology-driven service delivery, though Mitie shareholders have not yet voted and the transaction remains conditional on multiple approvals. Mitie's trading update showed 10% revenue growth in Q1, to £1.4bn, driven by 4% organic expansion and Marlowe integration, significantly outpacing the 2-3% UK FM market. The standout: contract wins jumped 33% to £1.6bn in total contract value, and the bidding pipeline hit a record £32.5bn, with over 70% due within 18 months.
For Mitie shareholders, the all-cash offer provides certainty of exit value, but the deal does not close until Q1 2027 at earliest and remains subject to court sanction and unspecified regulatory conditions. The combined entity will be private, removing Mitie from public markets if the scheme completes. The trading update validates Mitie's post-Marlowe strategy: organic growth is re-accelerating (4% vs prior headwinds), Business Services is thriving (23% growth), and the £700m cross-sell pipeline from Marlowe offers material upside. Net debt of £477m remains modest against the scale of the bidding pipeline, though seasonal cash outflow management will be key to leverage stability.
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