October 1, 2018 / 6:49 AM / 7 months ago

CORRECTED-UPDATE 1-Mitie to sell pest control business as part of restructuring

(Corrects Oct. 1 story to remove reference in second paragraph to Brexit uncertainty, which the company has said was a view held by its previous, not current, management team)

Oct 1 (Reuters) - British outsourcing firm Mitie Group Plc said on Monday it would sell its pest control business to Rentokil Initial Plc for 40 million pounds ($52.1 million) cash, as it looks to focus on its core businesses as part of a restructuring.

The company, which provides cleaning, security and healthcare services, has been restructuring since issuing profit warnings in 2016 and 2017.

Mitie has also formed a preferred supplier partnership with Rentokil, to provide a range of services, including pest control, to Mitie’s customers.

The company said the deal with Rentokil, UK’s largest provider of pest services, would free up its funds to invest in its core businesses.

The announcement comes a week after Mitie forecast muted profit and higher debt in the first half of the year, blaming increased technology costs. The company has been investing in technology and employee retention in a turnaround plan.

In December, the Bristol-based company said it would not sell its property management unit, as it saw “greater shareholder and strategic value in keeping the business”.

$1 = 0.7672 pounds Reporting by Karina Dsouza and Arathy S Nair in Bengaluru; Editing by Amrutha Gayathri, Bernard Orr

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