FM Contracts This Autumn: The Terms That Are Setting Business Values

In facilities management, a buyer is not really buying services. They are buying contracts, the people who deliver them, and the terms those contracts were won on. So when the rules around contracts shift, values shift with them. Several of those rules have moved this year, and most of the movement is in the detail rather than the headlines.

The OCS and Mitie deal is a contract story

In July, OCS agreed to acquire Mitie in a deal valued at around £3.1bn, which would create a group with combined revenues of around £8.5bn. Mitie shareholders approved the scheme by a wide margin in September, with completion expected in the first quarter of 2027, still subject to regulatory approvals and court sanction.

For owners of smaller firms, the point is not the size. A deal like this puts a very large contract book through a long review, and some clients and subcontractors will reconsider their arrangements along the way. That can open up work, and people, for well-run independents in the regions.

The wider market is still active. Arrowpoint counted 50 FM transactions across the UK and Ireland in Q2 2026, 31% above the long-term quarterly average. It also noted cost pressure intensifying across labour, materials and energy, and that hard FM commands a premium because of longer contracts, more defensible margins and clearer regulatory drivers.

Public contracts now come with a public scorecard

The Procurement Act 2023 changed what a public contract looks like from the outside. For contracts with an estimated value over £5m, section 52 requires the authority to set at least three key performance indicators before award. Since Thu 1st Jan 2026, section 71 has required authorities to assess performance against those KPIs and publish it at least once a year, and to publish a notice when a supplier breaches a contract or is not performing to the authority’s satisfaction after being given the chance to improve.

That matters in a sale. A buyer looking at a public sector book can now check published performance for the larger contracts, and so can your competitors at retender. A clean record is evidence you can point to. A poor one is visible to everyone.

Most smaller FM firms hold public work below that threshold, or as subcontractors. The direction still applies. Keep your own KPI reporting as if it will be read by a stranger, because in due diligence it will be.

Getting paid on time, down the chain

Under section 68, public contracts carry implied terms requiring payment within 30 days of a valid invoice. Section 73 implies the same terms into public subcontracts, and they cannot be written out.

For an FM business working under a prime contractor on public estates, this is worth knowing. If you are being paid late on public subcontract work, you have a firmer footing than you may think. For a sale, steady debtor days on public work make the working capital position easier to agree, and working capital is often where the last weeks of a negotiation go.

The wage floor is a pricing question

The National Living Wage rose to £12.71 an hour in April 2026, from £12.21. For soft FM businesses with large cleaning or front-of-house teams, that increase lands on almost every hour billed.

What a buyer looks at is not the rise itself but what your contracts do with it. Do they carry an indexation clause tied to the statutory rate? Were rates reopened in April, or absorbed? Is there a contract priced so tightly that the margin has quietly gone? We covered how buyers test this in the wage-floor margin test for soft FM.

The practical step is simple. List every contract, its renewal date and whether it passes through wage increases. Contracts without that protection are the ones to renegotiate at renewal.

TUPE and employment law are moving

In April the government opened a call for evidence on reforming the TUPE Regulations, which closed on Wed 1st Jul 2026. It said the aim was to support smoother mergers and acquisitions while protecting employees’ rights. No proposals have been published yet, and the government has said further consultation would follow.

The Employment Rights Act is further along. Lewis Silkin’s summary of the Act’s timetable sets out that measures to prevent a two-tier workforce on public outsourcing contracts are due in October 2026, that the unfair dismissal qualifying period falls from two years to six months for dismissals from Fri 1st Jan 2027, and that statutory sick pay has been payable from day one since April 2026.

For FM, where workforces move with contracts, this raises the value of good records. A buyer wants to know who transfers on each contract, on what terms, and what liabilities come with them. We set out why a well-documented workforce is an asset in TUPE and your workforce.

What an owner can do about it

None of these conditions is within an owner’s control. How ready the business is for them is.

Start with the contract schedule: every contract, its value, its length, its renewal date, its indexation terms and its KPIs. Contract length and renewal history remain the main currency of an FM valuation, as we covered in contract length and renewal history. Next, check that the employee records for each contract would survive a TUPE review. Then look at payment terms and debtor days on public work.

Renewals deserve their own look. A contract that comes up for retender in the middle of a sale process makes a buyer nervous, and a nervous buyer tends to move value into deferred consideration or an earn-out. If a large renewal is due soon, it is often better to win it, or extend it, before going to market than to ask a buyer to take the risk with you. Where a contract is marginal, deciding whether to rebid it at a better price, or let it go, is a decision best made by you rather than priced in by someone else.

A business that can hand over that schedule in a day reads very differently from one that needs a month to build it.

There are no live facilities management listings at the moment. Buyers can register their interest to hear when one comes to market. Owners who want a starting point can try the FM valuation calculator, which gives an indicative range and commits you to nothing.