Mitie has sold its social housing business which provides repairs and maintenance work to more than 30 landlords, to Mears in a deal believed to be worth up to £35m.

It is understood that Mears will pay an initial £22.5m for the business and then a further £12.5m over the next two years, dependent on the business achieving certain performance milestones.

The deal is conditional on Mears completing a private placement to raise funds to pay for the acquisition, and the TUPE transfer of 1,000 Mitie staff. For the 12-month period ending 31 March, Mitie made a pre-tax profit of £5m on turnover of £128m.

David Miles, group chief executive of Mears, said: “I am delighted with the acquisition, which will further strengthen Mears’ market leadership and contract profile in social housing. Given our strong operational platform and differentiated service delivery, together with our proven ability to turn around underperforming businesses, I am confident that we will deliver significant improvements to contracts, customers, tenants and employees.”

By Patrick Mooney, editor