Johnson makes £6m laundry hire swoop

JOHNSON Service Group has beefed up its textile rental division with a £6m acquisition.

The Cheshire company is buying the business and specified garment, linen, mat and towel contracts and related assets of Cannon Textile Care from OCS Group.

Cannon currently operates its textile rental business from laundries based in Glasgow, Manchester, Bristol, Newmarket and Balham, south London, with additional depots in Gateshead and Birmingham.

Johnson said the deal was conditional on a number of factors, including clearance from the Office of Fair Trading.

It added: “There is also a right of rescission by either party if there is a material adverse change in the business prior to completion or if regulatory clearance has not been received by May 29”.

The company said the consideration of £6.1m was based on Cannon’s annual contracted revenue being £15m a year, and the sum would be adjusted up or down to reflect the actual contracted revenue figure at the date of completion.

Preston Brook-based Johnson, which has sens its dry-cleaning shops encounter tough trading in recent months, said deal would be funded  in cash at completion and come form its existing debt facility.

Chairman John Talbot said “We are delighted to have exchanged contracts on this acquisition.  It will allow Johnsons Apparelmaster to improve its service to customers through an expanded geographical coverage”.

The revenue and operating profit relating to the business and assets to be acquired as included in the accounts for OCS for the year ended 31 March 2011 were £16.5m and £200,000 respectively.