Mortice cleans up with £4.5m Elite acquisition

Manchester-based Elite Cleaning & Environmental Services has been acquired by Mortice, the AIM-listed security and facilities management company and its wholly-owned subsidiary, Tenon Facility Management UK for £4.5m.

Founded in 1994, Elite has about 1,000 employees and offers a full range of cleaning services as well as additional facilities management services and support services.

It achieved revenues of £12.3m and EBITDA of £1m for the year ended December 31.

Its key services cover office, industrial, school and healthcare cleaning and its client base includes ITV, BMW, European Development Bank, Dorset and Wilts Fire Services, as well as a number of schools, colleges and medical centres and surgeries.

Singapore-headquartered Mortice said the acquisition, which is expected to be immediately earnings enhancing, further expands its UK footprint and is in line with its acquisitive and organic growth strategy.

A statement said: “Elite has a strong blue-chip client base, which is complementary to the company’s existing portfolio. In addition, once fully integrated with the company’s existing infrastructure, a number of operational savings are expected.”

Tenon UK and the company have agreed to purchase with the consideration to be satisfied by the transfer of £3.35m in cash to the sellers  – Gerard McGrath, Kathleen McGrath and John McGrath – subject to certain potential adjustments, offset against £1.6m of free cash in Elite, funded from new and existing debt facilities, and the issue of up to 1,458,333 consideration shares.

Manjit Rajain, executive chairman of Mortice, said: “We are delighted to further strengthen our position within the UK market.

“Elite has a strong reputation and client base and it offers clear synergies with our existing operations and presents many cross-selling opportunities, as well as immediately enhancing the group’s earnings.

“We are very excited by the wider market opportunities and ability to further drive profitability.”