A London-listed provider of fire safety services backed by Lord Ashcroft, the former Conservative Party treasurer, is exploring a sale of its biggest division in a move that could generate proceeds of about £650m.

Sky News has learnt that Marlowe is working with bankers at Rothschild on a review of its testing, inspection and certification (TIC) division, which accounts for the lion’s share of its revenue.

City sources said a process to hold exploratory talks with potential bidders had got under way in recent weeks.

Based on recent transactions in the sector, a sale of the unit could yield a valuation of up to 16 times its annual profit, equating to roughly £650m.

Insiders cautioned, however, that a sale would only take place if bidders met management’s expectations.

Marlowe was formed as a cash shell by Lord Ashcroft and Alex Dacre, and acquired its first operating business when it bought Swift Fire & Security in 2016.

Lord Ashcroft, the one-time prolific Tory donor, still owns about 12% of the company, worth more than £70m at Thursday’s closing share price of 592p.

A sale of its TIC business would effectively constitute a break-up of the group and leave it to focus on its higher-margin operations in areas such as compliance software.

A spokesman for Marlowe declined to comment.

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The prospective sale of its testing and inspection arm comes amid a frenetic period of corporate activity across the sector in Europe.

A number of buyout firms are reportedly circling Applus, a Spanish-headquartered company operating in a similar space.

Sources say that Isquared Capital, an infrastructure investor which jointly owns the temporary power business Aggreko in the UK, is preparing to launch a bid for Applus as soon as next week.

Any offer would be likely to value the company at roughly €2.2bn including debt.

Isquared is reportedly working with TDR Capital, the private equity group with which it owns Aggreko, on its bid.

Advisers at Bank of America, Goldman Sachs and Morgan Stanley are said to be involved with the prospective offer.

Apax and Apollo Global Management have also been reported to be examining bids for Applus.

Isquared declined to comment.

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