Johnson Service Group (JSG) has announced the acquisition of the entire share capital of London Linen Supply, a supplier of table linen and chefs' wear to the restaurant, catering and hospitality market, based in London.
In addition, JSG has announced that it intends to place 30,011,802 new Ordinary Shares to raise approximately £21.1m, net of expenses.
Paul Moody, chairman of JSG, commented: "We are delighted to have completed this acquisition which represents a further significant step in our plan to expand the range and scale of services offered by our Textile Rental business. The new equity maintains the strength and flexibility in our balance sheet which is important as we continue to look for further value enhancing acquisitions."
Chris Sander, CEO of JSG, added: "I have known London Linen for many years and have been very impressed with the quality of their business and the growth achieved in recent years. Its operations will complement our existing Stalbridge business and will give us significant production facilities near to the vibrant London restaurant market."
The acquisition is in-line with JSG's strategy of seeking out value accretive acquisitions and follows the acquisition of Bourne in 2014 which is continuing to perform ahead of the expectations. The deal will include the continued servicing of existing customer contracts with London Linen clients including Jamie Oliver, the Wolseley and Brasserie Blanc
London Linen's operations are focused on the restaurant and catering linen rental market and it currently supplies some 900 customers at more than 3,400 locations operating from a 76,000 sq ft leased premise located in Southall, West London. It processes, on average, 1.6 million pieces of linen per week, with a peak of some two million.
The total consideration payable for London Linen amounts to £69.4m in cash at completion including an estimated net cash position of £4m.
Application has been made to the London Stock Exchange for the Placing Shares to be admitted to trading on AIM. Admission is expected to become effective on 7 May 2015 and dealings in the Placing Shares will commence at that time. Following admission to trading of the Placing Shares, JSG will have 330,129,829 Ordinary Shares in issue.