Mears, the Gloucester-headquartered housing and social care provider is planning to sell it data business TerraQuest Solutions Limited for up to £72 million to a newly-incorporated private limited company controlled by London-based private equity company Apse Capital Limited.
If the disposal goes ahead, as planned, Mears will concentrate solely on specialist housing and care provision to central and local government.
The sale will significantly strengthen its balance sheet.
Mears has built a significant asset through the Birmingham-based TerraQuest business since 2009, including the contract to re-develop and operate the National Planning Portal – a web-based platform which processes around 90 per cent of all planning applications in England & Wales. In the financial year ended 31 December 2019, the TerraQuest Group generated revenues of £20.9 million and a profit before tax of £4.9 million.
The disposal is conditional upon the approval of Mears Shareholders and the consent of TerraQuest’s joint venture partner MHCLG, the Ministry of Housing, Communities and Local Government. Completion of the disposal is expected next month.
David Miles, Chief Executive Officer of the Group, said: “TerraQuest has been a great success story within the Mears Group. Through the provision of both financial and intellectual capital we have created a leading digital and technical services provider to the planning, infrastructure and property sectors across the UK. This transaction secures the next stage of TerraQuest’s development and allows Mears shareholders to realise significant value from this investment.
“The Disposal materially strengthens the Mears Group balance sheet and completes our strategic programme to focus on our core activities of specialist housing services to local and central government clients. We are also delighted at the support we have received from our relationship banks who, in conjunction with the disposal, have significantly increased our covenant headroom over the next twelve months.
“Our portfolio of high-quality contracts focused on our core housing services and the Group’s strengthened balance sheet mean we look to the future with confidence.“