The overhaul of East Grinstead-based Rentokil Initial continued this week when the troubled ratcatcher offloaded its UK security guard wing for £74.6 million.

Initial Security Limited (ISL), which employs 6,000 people, has been bought by MITIE Group, the Bristol firm which cleans and maintains public buildings.

The deal, which makes MITIE the second-largest manned guarding business in the UK with 9,000 security officers, includes £15.7 million of debt.

It marked the latest action by Rentokil as it battles to overturn two years of sliding profits by concentrating on its core pest control and washroom hygiene businesses.

Rentokil sold off its 29 UK conference centres to private investors for £325 million last year and recently closed its loss-making UK linen and workwear business.

Doug Flynn, chief executive of Rentokil Initial, said: "The sale of ISL reflects our continued focus on those areas of our business where we believe we can generate the greatest shareholder value.

"ISL is a high quality business with a good market position and a strong management team; however, we believe that MITIE should be better able to realise its full potential."

He added that Rentokil would continue to explore the possible disposal of its manned guarding operations in North America and Belgium.

For the financial year to December 25, ISL, which had been earmarked for disposal, made a profit of £4.5 million on a turnover of £130.7 million.

Rentokil's overall profits fell 17 per cent to £252.9 million as the company addressed what it called "a set of deeply rooted problems" in the business.

MITIE's chief executive, Ian Stewart, said: "A new force in the manned guarding industry has been created.

"I look forward to welcoming Initial Security UK's management and employees to MITIE.

"This acquisition transforms MITIE's security business, enhancing our strengths in terms of clients, sector specialisations and geographic footprint. There are exciting times ahead."

Richard Moule, managing director of Initial Security UK, added: "This is a positive move for the employees and customers of Initial Security UK.

"MITIE's strategic focus on the UK manned guarding market will produce significant opportunities for the business."

Wednesday, March 15, 2006