British independent caterer CH&CO has signed an agreement to purchase catering and hospitality business from UK’s facilities management and professional services company Mitie Group.

With more than 3,600 people in over 330 sites, Mitie Catering is a workplace dining, hospitality and event catering services provider in the UK and Ireland and the owner of Gather & Gather and Creativeevents.

CH&CO will provide a total consideration of up to £85m ($102.92m) in cash on a debt-free, cash-free basis. It includes an initial consideration of £73m payable in cash at completion and a deferred consideration of up to £12m.

The company will pay half of the deferred consideration within 12 months of completion, and the other half within four years of completion depending on certain performance milestones.

The decision follows a strategic review of Mitie’s business. Under the terms of the deal, both companies will also sign a strategic partnership to ensure ‘the “Gather & Gather” catering offer remains exclusive to Mitie’s clients as its only integrated facilities management (IFM) sector partner’.

It expects to complete the transaction in early September this year.

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CH&CO will retain Mitie Catering’s staff and senior management team, including its managing director Allister Richards.

CH&CO chief executive officer Bill Toner said: “This acquisition is a key part of our growth strategy and represents a great opportunity for Mitie, Gather and CH&CO. We are very excited about the future growth potential for our business in our strategic partnership with Mitie.”

Mitie Group CEO Phil Bentley said: “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.

“The Gather & Gather management team will continue to lead the business and we look forward to working with them on delivering their unique offering to our existing clients and on future IFM opportunities.”