Johnson Service Group Plc, Preston Brook, Cheshire, England, provider of dry cleaning, linen supply and workwear manufacturing services, acquired Zip Textiles (Services) Ltd, Birmingham, West Midlands, England, provider of commercial laundry services. Cash consideration GB£15m on a debt-free, cash free basis, together with additional debt of GB£2.7m.
Smith Cooper recently advised the shareholders of Zip Textiles (Services) Limited in the sale of the company to leading textile services group, Johnson. Johnson Service Group PLC has acquired the entire share capital of Zip Textiles for consideration of £15 million and assumed debt of £2.7 million, relating to the financing of recently installed processing equipment.
Zip, which serves the high volume hotel and leisure sectors from its processing plant in Birmingham, complements JSG’s existing Bourne business in providing geographical reach, operational efficiencies and additional production capacity for central England, with the potential to expand this further.
Whilst expected to be immediately earnings enhancing, the main focus of this acquisition is to improve operational capacity and extend the acquiror’s reach in hotel customers. It follows the recent successful acquisitions of Ashbon and London Linen in 2015. Zip reported revenue of £7 million for the year to 31 January 2015. The business operates from a freehold property which was extended and fitted out with modern equipment at a cost of some £2.7 million during 2015.
Tariq Mahmood, Managing Director of Zip Textiles, said: “Selling a company is not like selling a house it is far more intense and pressurised. Smith Cooper eased the burden, were always available to provide support and guided me through the process. Darren provided exceptional technical input and clear advice when I most needed it. Without Smith Cooper it would have been difficult to complete the transaction and I would absolutely recommend Darren and his team.”
Smith Cooper Team