LONDON (ShareCast) - Johnson Service Group has agreed to sell its facilities management activities to Bell Rock Bidco, a new company formed to effect the acquisition.

Financing will be provided from funds managed by Lyceum Capital Partners.

The consideration is £32.2m on a debt free, cash free basis and subject to adjustments for normalised working capital.

Initial net proceeds will be approximately £28m with up to a further £2.2m of deferred consideration potentially receivable.

The facilities management activities are undertaken within the Johnson Workplace Management subsidiary.

The total external revenue, including costs recharged to customers, of the facilities management activities for the year ended December 31st 2012 was £52.3m and adjusted operating profit was £4.5m.

Johnson said the group has refocused the business on Textile Services, having acquired Cannon Textile Care in March 2012, rationalised the Drycleaning business closing over 100 under-performing branches and disposed of its non-core Alex Reid business.

The disposal of facilities management represents a further step in the board's strategy to create a single, focused Textile Services business.

The initial net cash proceeds arising from the disposal will be used to reduce net debt by an estimated £28m.

Kevin Elliott, the Managing Director of facilities management activities, has resigned from the board with effect from completion of the disposal.

John Talbot, Executive Chairman, said: "I am very pleased with this disposal which effectively completes the long term plan of reorganising the group, refocusing the business on its original core market in Textile Services and achieving normalised borrowing levels."

Shares fell 0.51% to 48.50p at 10:33 on Wednesday.

RD

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