LONDON: Mitie Group PLC announced Wednesday a recommended cash-and-share offer to acquire Marlowe PLC in a deal valuing the company at approximately £366 million ($466 million).
The boards of both companies said they had reached an agreement under which Mitie Treasury Management Limited, a wholly owned subsidiary of Mitie, will acquire all issued and future ordinary shares of Marlowe. The acquisition will be implemented through a court-sanctioned scheme of arrangement under the U.K. Companies Act.
Under the terms of the deal, Marlowe shareholders will receive 1.1 new Mitie shares plus 290 pence in cash for each Marlowe share. Based on Mitie’s closing share price of 160 pence on June 4, the offer implies a total value of 466 pence per Marlowe share, representing a premium to recent trading levels.
The transaction, which has been unanimously recommended by Marlowe’s board, is expected to create a combined group with enhanced scale and capabilities in compliance and risk management services.
Phil Bentley, CEO of Mitie, highlighted the company’s transformation over the past eight years, evolving from a leading Facilities Management (FM) provider to a Facilities Transformation leader through strategic acquisitions like VSG and Interserve. Recent expansions in Power & Grid Connections, Renewable Energy, Data Centres, and Sustainability have further strengthened its position. With increasing regulations in Fire, Security, and Water & Air Quality, clients now demand comprehensive Facilities Compliance solutions. Marlowe, a leader in Testing, Inspection, and Certification (TIC), aligns perfectly with this need. The acquisition of Marlowe’s 3,000-strong team will enhance Mitie’s capabilities, unlock cost efficiencies, and drive revenue growth, positioning Mitie as a top Facilities Compliance provider.
Lord Ashcroft, Interim Non-Executive Chairman of Marlowe, stated that the acquisition delivers strong value for shareholders. Combining Mitie’s share issuance, Optima Health’s demerger (valued at 210p per share), and a 155p special dividend, the total value reaches 831p per Marlowe share—a 164.5% premium over December 2023’s low. He emphasized his commitment to maximizing shareholder returns and noted that this acquisition completes that objective. Ashcroft, retaining a 24.6% stake in Optima Health, expressed optimism about future ventures.
Mitie’s Three-Year Plan (FY25-FY27) shifts its focus from Facilities Management to technology-driven Facilities Transformation, leveraging data analytics and project capabilities. With leadership in Engineering Maintenance, Security, and Hygiene, Mitie aims to grow through key account expansion, project upsells, and M&A in high-margin sectors.
Increasing regulatory demands in Fire, Security, and Environmental Compliance have fueled the need for Facilities Compliance services—a £7.6bn UK TIC market growing at 4-6% annually. Marlowe’s expertise complements Mitie’s existing £250m TIC revenue, enabling cross-selling, margin improvements, and expanded project capabilities in Fire, Security, and Water.
The combined entity will lead in:
- Total Fire Solutions (£3.9bn market), integrating Active and Passive Fire Systems.
- Security Systems (£1.1bn market), enhancing remote monitoring and Alarm Receiving Centre services.
- Environmental Compliance (£2.6bn market), bolstering Mitie’s Energy and Waste divisions with Water Management solutions.
Mitie’s proven M&A track record—including Interserve FM, which delivered £56m in synergies—supports confidence in achieving £30m in pre-tax cost synergies by FY27. The deal is expected to be earnings-accretive in FY27, with leverage returning to Mitie’s target range (0.75-1.5x). This acquisition accelerates Mitie’s Three-Year Plan, reinforcing its leadership in Facilities Compliance.