Marlowe exploring £650m sale of inspection business - report

16th Jun 2023 08:04

(Sharecast News) - Marlowe, a provider of fire safety services, is reportedly exploring a sale of its biggest division in a move that could generate proceeds of about £650m.

According to Sky News, Marlowe is working with bankers at Rothschild on a review of its testing, inspection and certification (TIC) division, which accounts for the lion's share of its revenue.

City sources told Sky that a process to hold exploratory talks with potential bidders had got under way in recent weeks.

Based on recent transactions in the sector, a sale of the unit could yield a valuation of up to 16 times its annual profit, equating to roughly £650m.

Insiders cautioned, however, that a sale would only take place if bidders met management's expectations.

Marlowe was formed as a cash shell by former Conservative Party treasurer Lord Ashcroft and Alex Dacre, and acquired its first operating business when it bought Swift Fire & Security in 2016.

Lord Ashcroft still owns about 12% of the company, worth more than £70m at Thursday's closing share price of 592p.

A sale of its TIC business would effectively constitute a break-up of the group and leave it to focus on its higher-margin operations in areas such as compliance software.

At 0806 BST, the shares were up 7.9% at 639p.