Rentokil Initial has sold City Link to Better Capital after five years of substantial losses.

Under the deal the current management, led by managing director Dave Smith, will remain in post with a clear brief to transform the customer experience across its range of services.

The change of ownership is effective immediately.

Smith said: “My message to our customers would be that while in the short-term it is business as usual, very quickly we will start to see the access to new capital, and the expertise Better bring to bear, accelerating the investment and improvements we are making in our customer experience.” 

Better Capital specialises in the provision of investment capital for the acquisition and turnaround of UK and Irish businesses, typically with a turnover of up to £500m.

It has already worked with a number of well-known UK businesses including Jaeger, Spicers and Everest.

It is expected to invest £40m in City Link.

Commenting on the sale, Alan Brown, chief executive of Rentokil Initial, said: “I believe City Link has now turned the corner after five years of substantial losses.

“There is strong growth in the B2C parcels market, it now has a great management team and we have found a very committed investor in Better Capital.

“From Rentokil Initial's perspective, we have decided to divest of City Link at this stage of the turnaround so that we can concentrate on our core international service businesses in Pest Control, Hygiene and Workwear.  

“The sale positions Rentokil Initial as a stronger and more focused group.”