Mitie Group has entered into an agreement to sell its catering and hospitality business which includes Gather & Gather and Creativevents to CH&CO for a consideration of up to £85 million in cash as part of its strategy to focus and simplify the company’s operations.
As part of the deal, Mitie and CH&CO will enter into a strategic partnership ensuring that the “Gather & Gather” catering offer remains exclusive to Mitie’s clients as its only integrated facilities management sector partner.
The decision to sell Mitie Catering follows a strategic review of Mitie’s business, focusing in particular on how to ensure that Mitie’s clients benefit from the very best in catering choice and competitive pricing. This concluded that Mitie Catering’s long-term future would be better served by being part of a larger specialist catering group, rather than being self-delivered by Mitie.
As a Royal Warrant holder for the provision of catering services to Her Majesty The Queen and other prestigious clients, CH&CO possesses the expertise and scale to enhance the range of catering services that Mitie provides.
The staff and senior management team of Mitie Catering, including Managing Director, Allister Richards, will transfer to CH&CO and will continue to run the business. Whilst Catering services will remain an important part of Mitie’s IFM service offering to its customers, under the strategic partnership with CH&CO, Mitie will no longer be self-delivering this service.
Phil Bentley, Chief Executive Officer, Mitie Group plc, commented: “Mitie’s strategy is to invest in our core technology-led facilities management services – such as Security, Cleaning and Engineering Services – where we have a leading market position. Gather & Gather is a niche player in the £4 billion UK contract catering market. By teaming up with CH&CO at this time, we believe this ensures the best choice and competitive pricing for our clients, whilst releasing funds for reinvestment and strengthening our balance sheet.”
Allister Richards, Managing Director of Gather & Gather, said: “It has been a great pleasure to build this business over the last seven years and I’m so proud that our committed team now delivers exceptional food and drink to more than 250,000 customers daily across workplaces, historic venues and large outdoor events.
“Our growth has been fuelled by a determination to do things our own way, and to serve our customers in a style that better reflects modern tastes and expectations. To do this we have focused our efforts on our wellbeing programmes, inspiring collaborations such as our Gathered Table initiative, new technologies and of course our people, without whom none of this would be possible.
“Mitie’s input and support has been fantastic throughout, and we look forward to continuing working with them closely as a strategic partner. This next step is an exciting opportunity for us to be part of a group that is dedicated to providing catering and hospitality services to its clients. In CH&CO, we have found our business a home where we can build on our success and continue to thrive in new and existing markets. We are delighted to be joining their team.”
The Consideration comprises an initial consideration of £73 million payable in cash at completion, and a deferred consideration of up to £12 million.
The proceeds of the sale will be used to further strengthen Mitie’s balance sheet and reinvest in Mitie’s core business.
The deal brings an increase in turnover of £137 million to CH&CO, 330 more sites across the UK and Ireland, and an additional 3,600 team members to the CH&CO family.