Former subsidiary Daubney buys part of division for £1m, as two key directors go on gardening leave

Mowlem has sold off the part of its business that deals with M&E and small capital works, as Carillion was reported to be behind the takeover bid for the contractor.

It emerged this week that Mowlem has sold elements of its technical services division to former subsidiary Daubney.

Mowlem announced to the stock exchange two weeks ago that it was involved in early stage discussions with an undisclosed firm that was interested in making a bid for the whole company.

Both Mowlem and Carillion have refused to comment on the speculation.

Building understands that Mowlem has sold the “measured term contracts” section of its technical services division to Daubney for about £1m. This covers deals to carry out M&E maintenance and small capital works programmes for clients over a fixed period.

Daubney, which was acquired by Mowlem in 2001 and has since reformed as an independent company, will take over the division’s workload. This includes contracts for Land Securities Trillium on projects for the BBC, Norwich Union, the Department for Work and Pensions and the DVLA.

A Mowlem spokesperson said: “Mowlem has not pulled out of measured term contracts and indeed continues to bid for them.” However, the part of its technical services business sold by the company is its only stand-alone division for this type of contract.

Two key Mowlem directors from its technical services business are leaving. Steve Parkinson, managing director of Mowlem Technical Services and its Pall Mall cleaning division, and Alan Wade, managing director of Mowlem Technical Services, are on “gardening leave” and will quit by the end of the year.

A source close to the deal said: “Mowlem sold its measured term contracts business to Daubney last month. Nobody really knows what is going on with Alan Wade and Steve Parkinson; all we know is that the company has said they are on leave but remain employed until next year, but it is clear they won't be working during that time.”

The decision to pull out of part of the technical services market is part of chief executive Simon Vivian’s strategy to cut losses.

Vivian said in September that the company would be closing down some of its construction businesses, which have a combined turnover of about £50m, after announcing losses of £73m.