The acquisition will make Interserve one of the UK’s top three FM contractors.
Initial Facilities has operations in the UK, Ireland and Spain and employs approximately 25,000 people.
It provides a range of services, including cleaning, catering, security, M&E building maintenance, energy management and statutory compliance as well as fully integrated total facilities management (TFM) to a broad customer base. It has a greater proportion of private sector FM clients than Interserve.
Initial Facilities last year had revenues of £542.2m (2012: £563.9m) and operating profit of £8.8m (2012: £15.9m). It has gross assets on its books of £229.6m.
Interserve chief executive Adrian Ringrose said: "We believe that this acquisition will deliver significant strategic progress in growing one of our core businesses and will make us a top three player by revenue in the UK facilities services market.
"The breadth and fit of the services we will now be able to offer, added to the advantages of increased scale and potential synergies, will create a compelling proposition, leaving us well placed for future growth. We look forward to bringing the enhanced capabilities of the enlarged Group to a wider addressable market of both new and existing customers, whilst providing more opportunity for our expanded employee base.”
Mike Brown, managing director of Initial Facilities, added: "This is a good combination and a very complementary home for our business, its customers and employees. We will be a core part of one of the UK's largest support services organisations and that focus will undoubtedly present new opportunities that all of our stakeholders can be excited about. I am looking forward to working with the Interserve management team who share the same ambitions for the company going forward."
The deal remains subject to shareholder approval.