Mitie Regulatory News (MTO)

9 June 2022

Mitie Group plc

LEI number: 213800MTCLTKEHWZMJ03

Mitie strengthens decarbonisation solution offering with the

acquisition of Custom Solar

Mitie Group plc ('Mitie' or the 'Group') announces today that it has entered into a sale and purchase agreement ('SPA') to acquire the entire issued share capital of Custom Solar Ltd ('Custom Solar'), a solar power solutions company specialising in the development, design, installation and maintenance of solar power systems for public and private sector clients. 

Custom Solar's design and installation expertise, combined with Mitie's industry leading project management and mobile engineering offering, will support Mitie's ambition to be a leading provider of end-to-end green energy solutions.

The transaction consideration comprises an initial payment of £8m, with deferred payments in aggregate of up to £4.4m by the end of FY25, linked to performance targets. Custom Solar will be acquired cash free, debt free, with a normalised level of working capital. The transaction is expected to complete on 30 June and will be funded through existing facilities. For the 12 months ended 31 March 2022, Custom Solar generated revenues of £15m and profit before tax of £2m and had gross assets of £7m. Custom Solar is expected to be accretive to earnings in the first 12 months of ownership. 

With the demand for sustainable energy solutions set to increase significantly, UK solar power generation is targeted to reach 40GW in 2030, up from current levels of 14GW1. Mitie's strategy is to fill a gap in the market for truly integrated solar solutions, building on its expertise in upgrading the electrical infrastructure and providing grid connections to support the UK's decarbonisation agenda. This follows Mitie's recent acquisition of Rock Power Connections which specialises in high voltage electricity grid connections, electrical infrastructure upgrades and EV charging installations.

The staff and senior management team of Custom Solar, including Managing Director, Matthew Brailsford, will join Mitie to help drive the business forward.

Simon Venn, Managing Director, Technical Services, Mitie, said:

"The acquisition of Custom Solar continues Mitie's strategy of investing in high growth, high return businesses within the energy and decarbonisation market to help our customers accelerate their path to Net Zero.

"Custom Solar's expertise in large scale commercial solar deployments, combined with Mitie's high voltage connection and project management expertise, will enable us to offer end-to-end renewable power generation at scale. With our client base including national brands, public sector organisations and critical infrastructure providers, this is yet another element of our support to help decarbonise Britain."

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1Research from Solar Energy UK

For further information

About Mitie

Founded in 1987, Mitie's job is to look after places where Britain works and is the leading facilities management company in the UK. We offer a range of services to the Public Sectors in Central Government and Defence and Communities (Healthcare, Education and Campus & Critical). Our Technical Services (Engineering Services, Energy, Water and Real Estate Services) and Business Services (Security, Cleaning and Office Services) divisions serve private sector customers in Telecoms, Financial & Professional Services, Transport and Industrials and increasingly to the public sector. Finally, our Specialist Services (Care & Custody, Landscapes, Waste Management and Spain) division serves both the public and private sectors in these niche businesses.

Mitie acquired Interserve's facilities management business on 30 November 2020 and now employs 72,000 people. We are the champion of the 'Frontline Heroes' who have kept Britain working during the COVID pandemic. We take care of our customers' people and buildings, through the 'Science of Service', delivering essential services and deploying industry-leading technology to create safe and effective workspaces.

The business continues to execute its technology-led strategy and in the past twelve months has received multiple awards. Find out more at www.mitie.com.