Mitie Group makes bid for Lord Ashcroft-founded Marlowe
Mitie Group has made a £366m offer for Lord Ashcroft-founded Marlowe, as revenue surged 13 per cent at the outsourcing giant.
The FTSE 250 firm said the takeover of the AIM-listed testing and inspection group would deliver £30m of cost synergies as part of its full-year results today.
“Adding Marlowe’s 3,000 highly respected colleagues to Mitie’s capabilities and providing access to Mitie’s clients will generate significant revenue growth opportunities as well as immediate cost efficiencies,” said Mitie CEO Phil Bentley.
Marlowe’s board unanimously recommended the takeover, which would offer 290p and 1.1 new Mitie share for every Marlowe share, reflecting a value of 466p compared to the firm’s current 406p price.
After speculation emerged earlier this week about a possible takeover, Marlowe’s share price jumped more than 10 per cent.
Mitie’s results
Operating profit reached £162m in Mitie’s full-year results to March 31, down slightly from £166m the year before due to a spike in acquisition-related costs and the consolidation of joint venture Landmarc.
The group’s total order book reached a record £15.4bn, up 35 per cent from the year before. However, renewals dropped to 59 per cent from 79 per cent, reflecting the loss of two public sector contracts.
Mitie also cut its estimate of the annual cost increase from the hike in Employer’s National Insurance Contributions from £60m to £50m, and said contractual recoveries from customers are expected to be at least £35m throughout the next year.
The group’s stock price jumped 27 per cent throughout April after announcing a new £125m stock buyback programme, after completing a £100m programme throughout the previous year.
“2025 was a year of good financial and operational progress for Mitie, as we embarked on our new Three-Year Plan for Facilities Transformation,” said Bentley.
“The investments we made in the foundation year of our Plan contributed to the delivery of double-digit revenue and operating profit growth, alongside a return on invested capital that significantly exceeds our weighted average cost of capital.”