News blog
Managed Support Services
- BY: Andrew Hore |
- POSTED: 18/11/2011 |
Managed Support Services (MSS) is selling its remaining operations and turning itself into a shell.
The building services division has been sold to Initial Facilities Management for up to £6.5m. The business is profitable but remains relatively small. The sale was sparked by unsolicited approaches that led to the details of the business being circulated to interested buyers.
MSS will receive £4m in cash with up to £1.5m payable as long as at least £10.5m of customer contracts are transferred to the new owner. Nothing extra is payable if less than £8.4m of contracts are transferred. This will be based on the situation after three months. A further £1m can be retained by the buyer and half will be released when the completion balance sheet is published and the other half held for a further six months in order to cover any warranty claims.
Chief operating officer Jamie Reynolds will resign on completion.
The cash raised will be used to repay debt and redeem the £500,000 worth of loan notes. These repayments and the deal fees will amount to £3m.
During the summer the company’s compliance division was sold to Capita for £3.85m. MSS expected to receive £3m net.
MSS will have a new investing policy which involves seeking acquisitions in the UK in support services. That covers building services, software and business to business services, where the management team has experience.
At 1.3p a share, MSS is valued at £2.73m. A placing at 7p a share raised £3.1m to finance the acquisition of Environmental Control Services just over one year ago. Early in 2009, MSS raised £6m at 8p a share.
Download the latest AIM Journal from http://www.hubinvest.com/AIMPDFNovember2011_26.pdf
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