Laundry group makes £52.6m acquisition

CHESHIRE-based laundry services specialist Johnson Service Group has acquired Portgrade Ltd and its subsidiary Afonwen Laundry Ltd for £52.6m.

The debt free, cash free deal brings Afonwen, a supplier of high volume hotel linen operating from facilities in Pwllheli, Reading and Cardiff and with a substantial distribution depot in Leeds, into the Johnson fold.

Additionally, JSG said that it intends to place 33,061,540 new ordinary shares to raise approximately £28.7m, net of expenses.The acquisition and the placing are not inter-conditional, the company said.

Meanwhile the company has agreed a £150m financing package with its existing banks.

Johnson said the acquisition and placing are expected to be immediately earnings enhancing.

The purchase of Portgrade is in line with Johnson’s strategy of targeting “value accretive acquisitions” and follows successful deals to buy Bourne in 2014, London Linen and Ashbon last year and Zip in January.

Johnson says it will now become of the UK’s largest providers of linen to the high volume hotel market.

There has also been the additional complementary acquisition of Chester Laundry Ltd (trading as Chester Textile Services) for a cash consideration of £3.3m on a debt free.

Johnson chief executive Chris Sander said:  “I am very pleased to announce further acquisitions that increase our presence in the textile rental market and the addition of Afonwen significantly strengthens our quality and service offering within the high volume hotel linen sector.

“I have known Afonwen for many years and have been very impressed with the quality of its business, the investment in additional laundry facilities and the resultant growth achieved in recent years.
 
“Its operations complement our existing high volume linen business in Bourne and Birmingham and will give us additional production facilities to serve our customers better and provide the opportunity for logistical efficiencies.

Mark Woolfenden, managing director of Afonwen, said: “We are delighted to be joining Johnson Service Group, a company which shares many of our values in delivering first class customer service and high quality linen products to the hospitality industry.

“With increasing consolidation in the UK textile rental market, the opportunity to scale up into a larger organisation and allow us to offer fully nationwide coverage was a huge attraction. We look forward to continued growth.”

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