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LONDON (Alliance News) - Mitie Group PLC on Monday said it sold Mitie Pest Control Ltd to FTSE 100-listed pest control firm Rentokil Initial PLC for GBP40 million in cash.
The outsourcer said it plans to use the majority of proceeds to strengthen the balance sheet and accelerate partial repayment of the deficit under its defined benefit pension scheme, with the remainder being reinvested in core businesses.
Mitie Pest reported pretax profit of GBP2.0 million for the year ended March 31. Earnings before interest and tax, adjusted to exclude non-recurring items and the recharge of Mitie central service costs, were GBP3.2 million over the same period.
For the six months to the end of September, Mitie Pest is expected to deliver Ebit of GBP2.4 million, the company said.
Meanwhile, Mitie Pest's Interim Managing Director Andy Halsall will continue his role with the company, Mitie said, for an interim period, to ensure a smooth transition of the business from Mitie to Rentokil and ensure continuity of service for Mitie's customers.
Separately, the company said it has entered into a preferred supplier partnership with Rentokil, covering a range of services provided as part of an integrated facilities management offering to Mitie's customers.
"Historically, Mitie has worked with preferred partners to deliver certain specialist services for our clients. By teaming up with Rentokil Initial - the UK's largest provider of Pest services - we free up funds to invest in our core businesses, whilst ensuring service quality and innovation are maintained for our clients," explained Chief Executive Phil Bentley.
Shares in Mitie were trading up 0.3% on Monday at 147.20 pence each, while Rentokil shares were 1.7% higher at 323.90p.
