Acquisition

7th Mar 2006 13:38

MITIE Group PLC07 March 2006 MITIE Group PLC ("MITIE") Acquisition of Rentokil Initial UK Manned Guarding Business MITIE is pleased to announce that it has acquired the entire issued sharecapital of Initial Security Limited (Initial Security UK), being the UK mannedguarding business of Rentokil Initial plc. The consideration for the business is£74.8 million comprising £59.1 million for the equity of the business and £15.7million representing inter-company and other debts at 25 December 2005. MITIEwill assume additional debt in the business of approximately £2million inrespect of short-term working capital movements since 25 December which willunwind over the coming months. Initial Security UK is a leading supplier of security services, providingcontract guarding, aviation security, patrol and alarm response services and keyholding to a wide range of government, commercial, industrial and retail clientson over 2,000 sites. Initial Security UK employs over 6,000 staff in 18 branchesacross the UK. In the year ended 25 December 2005, Initial Security UK generatedturnover of £130.7 million and profit before tax of £4.5 million. Gross assetsof Initial Security UK at 25 December 2005 were £39.3 million. Following the acquisition, MITIE Security will become the second largest mannedguarding business in the UK employing over 9,000 officers. Initial Security UKadds significantly to MITIE's existing security business which, in the yearended 31 March 2005, generated £54 million turnover and employed circa 2,200people. Initial Security UK is a strong fit with MITIE's existing securitybusiness, adding specialism in the aviation and retail sectors and strengtheningMITIE's regional operations. MITIE will fully integrate Initial Security UK withits current security division and expects to realise significant synergybenefits across all elements of the business. Whilst the acquisition is expectedto be earnings enhancing in the year ending 31 March 2007, the benefits of thecost savings will be absorbed by the integration costs in the first full year ofownership and therefore the full benefits of integration are only expected to berealised in the financial year ending 31 March 2008. MITIE's Chief Executive, Ian Stewart, commented: "A new force in the mannedguarding industry has been created. I look forward to welcoming Initial SecurityUK's management and employees to MITIE. This acquisition transforms MITIE'ssecurity business, enhancing our strengths in terms of clients, sectorspecialisations and geographic footprint. There are exciting times ahead." Richard Moule, Managing Director of Initial Security UK, stated: "I am delightedthat we have become a part of MITIE. This is a positive move for the employeesand customers of Initial Security UK. MITIE's strategic focus on the UK mannedguarding market will produce significant opportunities for the business." 7 March 2006 For further information, please contact: Ian Stewart, Chief Executive, MITIERuby McGregor-Smith, Chief Operating Officer, MITIEThe afternoon of Tuesday 7 March 2005 on 020 7567 0558All other times 0117 970 8800 John Telling, Head of Corporate Affairs, MITIETel: 020 7089 2500Mob: 07979 701006 This information is provided by RNS The company news service from the London Stock Exchange

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Related Shares:

MitieRentokil Initial