29th Apr 2016 08:35
LONDON (Alliance News) - Textile services company Johnson Service Group PLC on Friday said it has agreed to acquire Afonwen Laundry Ltd for GBP52.6 million in cash and said it will raise funds through a share placing.
Afonwen is a supplier of high-volume hotel linen and operates three laundry facilities in the UK and Wales. Johnson said the deal will make it one of the largest providers of linen to the hotel market and will boost its national coverage in the UK.
Johnson will raise around GBP28.7 million through the placing of 33.1 million shares at 90.00 pence per share, which will be used to reduce its debt in the short term and shore up its financial position. Shares in the company were up 0.1% to 92.30p, having initially fallen on the news.
Johnson Service also has agreed to increase its existing bank facility to GBP150.0 million, comprising a GBP120.0 million revolving credit facility and a GBP30.0 million one-year short-term facility.
"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," said Chris Sander, Johnson's chief executive.
"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," he added.
By Sam Unsted; [email protected]; @SamUAtAlliance
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