Commercial laundry firm acquired at 1.5x revenue
Tue, 03 Sep 2024 | BUSINESS SALE
Textile rental, cleaning and care provider Johnson Service Group has acquired a company that provides linen services to luxury hotels across London and the South East. Empire Linen Services Limited is a leading commercial laundry service, providing linen, towelling and workwear hire and laundry services.
The company has been acquired by Cheshire-headquartered Johnson Service Group for £20.6 million, in a deal that expands the buyer’s services across the luxury hotels sector in London and the South East.
The consideration represents a multiple of approximately 1.5x Empire’s £13.9 million revenue for the year ending June 30 2024, on which it generated pre-tax profits of £2.8 million. Empire employs approximately 170 staff and operates from a 26,000 sq ft leasehold site in Tottenham, North London.
The announcement of the acquisition comes alongside Johnson Service Group’s results for the six month period to June 30 2024. During that time, the listed company increased its revenues from £215 million to £244.1 million, while statutory profit before tax grew from £13.5 million to £18.7 million.
The group has reported increasing new sales activity, while strengthening its pipeline in hotel, restaurant and catering (HORECA) and workwear. It has also opened its Enfield depot, improving access for customers across London and South East.
Peter Egan, Chief Executive at Johnson Service Group, commented: "The group is reporting a strong financial and operational performance for the period, having delivered a significant uplift in year-on-year profitability. This result is testament to the resilience of our business model, the strength of our relationships with our customers and suppliers and the hard work of our employees.”
"We remain focused on organic growth initiatives, optimising operational efficiencies through a combination of targeted capital investment and continuous improvement of our working practices whilst also continuing to expand our geographical coverage through the successful execution of earnings enhancing acquisitions, as demonstrated by the acquisition of Empire, announced today, which represents a further step in our strategy to expand the range and scale of services we offer.”
UK companies are increasingly using M&A to adapt to changes in their industries
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