MITIE, the FTSE 250 strategic outsourcing company, today announces the launch of the ‘MITIE Entrepreneurial Programme’, commencing with its first £10m fund to back management teams with innovative ideas for starting mutually owned businesses in the United Kingdom.

It is open to people from both the private and public sectors who want to run a business with MITIE’s support. With a rapidly changing landscape in the UK public sector, the fund will be particularly targeted at teams that have considerable public sector experience and innovative business ideas to support the Government's focus on efficiency and deficit reduction. 

The new fund will be open to dynamic management teams with a viable business plan to develop a mutually-owned business with the support of equity, working capital, management expertise, back office and administrative infrastructure from the UK's leading outsourcing group. 

MITIE, which stands for Management Incentive Through Investment Equity, has a long history of partnering with management teams to start up businesses, having participated in over 80 successful start-ups using the 'MITIE model' in its 23-year history.

The 'MITIE Model' is structured so that management teams take an equity stake in a business which they are motivated to grow over a five to ten-year period and is eventually acquired by MITIE in full. This model has not only supported hundreds of entrepreneurs to build successful businesses in the UK, but has contributed to MITIE's excellent track record of growth and allowed those entrepreneurs to share in that success. It has also provided the basis for many successful careers in outsourcing, with a large number of MITIE's senior management team having participated in equity models. 

Ruby McGregor-Smith, MITIE’s Chief Executive commented; “We are passionate about providing opportunities for people to develop their careers and grow successful outsourcing businesses. With the launch of this fund we hope to attract dynamic entrepreneurial teams that want to start mutually owned businesses which provide innovative services to their customers and create jobs in the UK.”

For more information on the MITIE Model or if you have an idea for a business that you would like to discuss with the Corporate Development team at MITIE, please visit www.mitie.com/entrepreneurs. 

-ENDS-

Notes for editors 

How the MITIE start-up model works 

The model has operated since MITIE started in 1988. The process develops as follows: 

1. A team that wants the opportunity to run a mutually owned business approaches MITIE with their business idea.
2. Provided that their business idea fits with our strategy and does not conflict with any of our existing businesses, we interview the team.
3. If we like the business idea and the team they prepare a business plan. 
4. There is then an approval process which concludes with sign off by the Executive Board. 
5. The business plan determines the capital requirement. MITIE invests at least 51% of the initial capital required and the management team invests the balance. 
6. A limited company is established, placed in MITIE’s structure depending on the business activity being pursued. The start-up business is sponsored by an Executive Board Director and supported by the Head Office team.
7. The team grows their business over the next five to ten years.
8. Between the fifth year and the tenth year the minority shareholders have an opportunity to serve a transfer notice on MITIE Group PLC to earn out their minority interest.
9. In order to calculate the value of the minority stake in the business we use an agreed multiple of post-tax profits averaged over the previous two years, or three years depending on the type of business.
10. The management team stays in place after the earn-out and continue to grow the business and progress their career within MITIE. 

Visit us at www.mitie.com/entrepreneurs