StockMarketWire.com - Facilities management company Mitie said it had agreed to sell its catering and hospitality business to CH&CO for up to £85m.

The two companies also entered into a strategic partnership, which Mitie said would ensure its catering offer remained exclusive to Mitie clients.

The decision to sell followed a strategic review of Mitie's business that concluded the catering unit's long-term future would be better served by being part of a larger specialist catering group.

Sale proceeds would be used to strengthen Mitie's balance sheet and reinvest in its core business.

The acquisition cost comprised an initial consideration of £73m payable in cash at completion, and a deferred consideration of up to £12m.

Half of the deferred consideration was payable within 12 months of completion and half was payable within four years, subject to the achievement of certain performance milestones.

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