Outsourcing firm Mitie is to sell its social housing business to Mears Group in a
deal worth up to £35m.
Mears will take control of Mitie Property Management and MPS Housing for an
initial payment of £22.5m and then up to £12.5m payable depending on reaching set performance goals.
Mitie will use the cash to strengthen its balance sheet
and pay down some of its pension deficit.
Service staff protest outside Royal Cornwall Hospital
Political Reporter, BBC Radio Cornwall
Staff who work for the outsourcing company Mitie at the Royal Cornwall Hospitals Trust are staging a protest over pay and conditions.
The firm took over the so-called "hotel services" which includes everything from cleaning to portering and security in a controversial seven-year contract that started in 2015.
One employee told the BBC that he earned £1 above the minimum wage when he was employed by the NHS, but that figure now stands at 3p under with the Mitie contract.
The BBC has contacted Mitie but it has declined to comment.
Mitie staff, who do some of the lowest paid jobs in the hospital - they're cleaners, porters, catering assistants - and they haven't had a pay rise for at least four years. They work for Mitie, which is a private contractor so not part of the NHS. Their colleagues in the NHS have had a pay rise, they haven't had anything."
Carillion collapse 'raises fundamental questions'
Mitie says that the collapse of Carillion raises "some fundamental questions about the outsourcing industry".
In a trading update, the outsourcing company's chief executive Phil Bentley, said: "Managing the buildings and the workplaces of our clients is a complex business."
Mitie is undergoing a turnaround programme and it said sales growth for the year to 31 March was "modest".
It was recently relegated from the FTSE 250 in the latest quarterly review on the stock market indexes
But Mitie said operating profits were in line with expectations and its debt is "comfortably within banking covenants."
Mr Bentley said: "The year ahead will remain challenging as we continue to transform Mitie, but we expect to see modest revenue growth with improved profits and cash flow generation."