Mitie Group has announced a £366m bid for Marlowe, founded by Lord Ashcroft, as the outsourcing behemoth reported a 13% surge in revenue.
The FTSE 250 company revealed that the acquisition of the AIM-listed testing and inspection group is expected to yield £30m in cost synergies, according to its full-year results released today, as reported by City AM.
“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,” commented Mitie CEO Phil Bentley.
Marlowe’s board has given unanimous backing to the takeover offer, which proposes 290p plus 1.1 new Mitie shares for each Marlowe share, valuing it at 466p against its current trading price of 406p.
Following rumours earlier this week about a potential acquisition, Marlowe’s stock value soared by over 10%.
Mitie’s results
In Mitie’s financial update, the firm posted an operating profit of £162m for the year ending March 31, a slight decrease from £166m the previous year, impacted by heightened costs related to acquisitions and the integration of joint venture Landmarc.
Mitie’s total order book hit a record high of £15.4bn, marking a 35% increase year-on-year, although contract renewals fell to 59% from 79%, due to the loss of two public sector contracts.
Mitie has revised its estimate of the annual cost increase from the rise in Employer’s National Insurance Contributions, reducing it from £60m to £50m, and anticipates contractual recoveries from clients to be at least £35m over the next year.
The company’s share price soared by 27 per cent throughout April following the announcement of a new £125m share buyback scheme, having completed a £100m programme during 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,” Bentley stated.
“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.”
