Textile services group buys Zip for £15m

DRY cleaning and textile services group, Johnson, has strengthened its portfolio with the £15m acquisition of Birmingham-based Zip Textiles.

The deal sees Cheshire-based Johnson acquire the entire share capital of the business on a debt-free, cash-free basis, together with additional debt of £2.7m in relation to the financing of recently installed processing equipment.

Zip serves the high volume hotel and leisure sectors from its home processing plant and Johnson said the acquisition complemented its existing Bourne business in providing geographical reach, operational efficiencies and additional production capacity for central England. There is also the potential to expand the business.

While the deal is expected to be immediately earnings enhancing, the main focus of the acquisition will be to improve operational capacity and extend JSG’s reach of existing hotel customers.
 
The deal follows the recent successful acquisitions of Ashbon and London Linen in 2015.

Zip reported revenue of £7m for the year to January 31, 2015.  The business operates from a freehold property (book value of £4.4m) which was extended in 2015 and fitted out with modern equipment at a cost of £2.7m.

Chris Sander, chief executive of Johnson Service Group, said: “Zip is an extremely well invested business that offers good synergies with Bourne, geographical reach and scope to increase processing capacity significantly.  Having expanded our hotel and restaurant divisions through the acquisitions of Ashbon and London Linen, the addition of Zip to the JSG family marks the latest milestone in our growth strategy.”

Sue Russell and Richard McKay, of law firm Hill Dickinson in Liverpool acted on behalf of Johnson Service Group.