By Martyn Freeman, CEO of Q3 Services

Martyn Freeman was Managing Director of the Facilities Management division and latterly Chief Development and Strategy Officer at Mitie spanning a 25-year career, before establishing the Q3 Services challenger business in 2018.

From an article featured in FMJ magazine, July 2026

The proposed OCS acquisition of Mitie has been described as a shockwave running through the FM sector. The timing may be surprising, but I am not sure it should shock anyone. If anything, it is one of the clearest signs yet that the top end of our market is running out of easy ways to deliver sustainable growth.

This was always where the numbers were heading

At a certain scale, organic business growth does not just become difficult. It starts to become mathematically brutal. Shareholders will always expect continuous growth, but the market does not always provide enough new opportunity to deliver it contract by contract, at the margins they demand. I know from personal experience how uncomfortable that pressure can become.

The numbers tell an interesting story. If a facilities management company has revenues of around £5 billion and roughly 10% of its business comes up for renewal each year, then even in a good scenario it might lose around 5% of revenue through churn. That is £250 million that has to be replaced every year simply to stand still.

Assuming a generous one-in-four win rate, then that business would need to bid for around £1 billion of new work every year, before it has achieved any net growth at all. The resource required to chase that pipeline is enormous: bid teams, sales teams, estimators, business development managers and subject matter experts across ESG, energy, technology, social value, compliance, credit risk and more.

That is the uncomfortable reality behind many of these deals. The headline language will be about scale, efficiency, capability and geographic reach. Those things may all be true, but the deeper driver is much simpler. Very large businesses need very large ways to grow, and acquisition is often the only lever big enough to move the dial.

Once that dynamic takes hold, it is difficult to stop. The big players have become victims of their own success and if the market cannot provide enough organic growth, the next question very quickly becomes, who should we buy next? On this logic, I’m sure further acquisitions will follow.

Consolidation is not just a strategy. It is a symptom.

The OCS/Mitie transaction is not a one-off. It is part of a much bigger shift in the FM market, where the largest providers are trying to position themselves around complex, regulated and mission-critical environments: government, defence, healthcare, infrastructure, life sciences and other sectors where scale still carries weight. It plays to their strengths and excludes smaller players who cannot match the demands or deal with the complexity.

That makes perfect, strategic sense for businesses operating at that scale, particularly when traditional corporate real estate is changing too. Large, lavish headquarters are no longer the default model. Hybrid working, downsizing and flexible workspace have altered the shape of corporate demand, reducing the number of large multi-site opportunities that once were the bread and butter for the biggest FM contractors.

As a result, the battleground for the biggest players is shifting towards public sector, industrial, infrastructure and highly regulated environments. But even here, the picture is not straightforward. In government, for example, the appeal of insourcing is growing. Recent policy direction around ending “outsourcing by default” signals that future public sector contracts may face more scrutiny, with a greater emphasis on public value, accountability and in-house capability.

This creates a paradox. The largest FM businesses need bigger and more complex contracts to justify their scale, but the pool of those contracts may not be growing at the desired rate. At the same time, FM itself is moving beyond traditional service provision into infrastructure, compliance, energy, technology and transformation. That brings the sector into competition with organisations from adjacent markets like Babcock and Serco and increases the pressure on providers to seek even larger, broader and more international opportunities.

The likely outcome is yet more consolidation at the top end of the market. That may create larger balance sheets and broader service lines, but it also creates a real risk for clients in the shape of fewer credible choices, less competitive tension and a market where size starts to be mistaken for value.

We should also be more honest about the real cost of chasing these contracts. FM providers routinely pour huge amounts of time and intellectual capital into tenders, giving away ideas, innovations, technical solutions and transformation plans before a contract has even been awarded. Too often, that thinking can be absorbed by clients and repackaged elsewhere. If the industry wants genuine innovation, it needs to ask whether the bidding model itself is becoming part of the problem.

The opening is there for SMEs brave enough to take it

For SMEs, this is not a moment to look nervously at the giants. It is a moment to look at the gaps they leave behind.

As the largest providers become bigger, they inevitably become more layered and complex – often more complex than the clients they serve. Decision-making moves further away from the front line. Senior leaders become less visible to clients. Processes become more rigid and standardised, and the ability to create a distinctive customer experience tailored to a specific business or culture, becomes more difficult to achieve.

That is where entrepreneurial, well-run SME providers can offer something different. At this end of the market, the owners are often still the operators. Senior people know their clients personally. They can respond quickly, make decisions without unnecessary layers of approval and shape services around the customer rather than forcing the customer into a standard operating model.

It is the difference between a five-star hotel, where the general manager knows the most important guests by name, and a mass-market hotel where the customer checks in on a screen and may never speak to a member of staff. Both models have their place, but they deliver very different experiences.

For clients who feel out-scaled by the emerging giants, the middle market and SME sector now has a chance to step forward with confidence. Not by pretending to be mini versions of the biggest providers, but by being clear about the value of human scale: access, accountability, agility and genuine partnership.

The OCS/Mitie deal may redraw the competitive map at the top of UK facilities management, but the change is impacting every level. For ambitious SMEs, this could be the moment to show that personal relationships, fast decisions and service delivered close to the customer are not old-fashioned values. They are competitive advantages.

Let’s dispel the myth that SME providers cannot organise, mobilise or manage larger contracts. In many cases, that is simply not true. Running a bigger contract is not a mysterious art available only to the largest corporates; it is a matter of having the right systems, governance, people and discipline, then scaling them properly. Many SME leaders have already won, mobilised and delivered major multi-million-pound contracts for the biggest names in the sector. They understand the complexity, the risk, the operational pressure and the client scrutiny because they have lived it first-hand. The difference is that they now bring that experience into businesses where decisions are faster, accountability is closer and the senior people who made the promise are still involved when the service is being delivered.

In a consolidating market, scale will always attract headlines. But scale is not the same as service. For clients who want a provider that understands their business, knows their people and can act when it matters, this may be exactly the moment for SME FM businesses to stop apologising for their size and start competing on it.