Seaport Capital has partnered with the founders and operators of Linen King to acquire the company from Cimarron Healthcare Capital.
Linen King is a provider of outsourced laundry services to hospitals and healthcare facilities across the mid-South. The company operates six laundry facilities in Arkansas, Tennessee, Oklahoma, Missouri and Kansas and processes over 70 million pounds of hospital laundry each year. Linen King was founded in 1999 by L.K. McCullough and CEO Leonard McCullough (son) and is headquartered in Tulsa, Oklahoma.
“I’m looking forward to our new partnership with Seaport Capital and the exciting growth opportunities they will help us execute on for Linen King,” said Leonard McCullough. “Seaport has a very successful history of helping entrepreneur-led services companies grow. They quickly understood, and demonstrated that they shared, the values our company embraces in providing not only the highest levels of service to our customers but a great place to work for our employees.”
Seaport Capital invests from $10 million to $30 million of control equity in US-based companies that have enterprise values of $25 million to $150 million and EBITDA of $3 million to $15 million. Sectors of interest include business and information services, communications and infrastructure, and media. The firm was founded in 1997 and is led by partners Bill Luby, Jim Collis, Scott McCormack, Bob Tamashunas, and Drew Meyers.
“We’re excited to partner with the Linen King team,” said Mr. Tamashunas. “Linen King’s business model and approach of staying regionally-focused in a highly fragmented industry, maintaining long-term customer contracts, and being led by its founders aligns well with Seaport’s investing strategy.”
Salt Lake City-based Cimarron Healthcare Capital (CHC) invests from $5 million to $25 million in healthcare companies that have $5 million to $75 million of revenue and up to $15 million of EBITDA. CHC was founded in 2014 and utilizes an evergreen fund structure backed by family office investors and the principals of the firm.
“Linen King’s impressive operating tenure and recent growth is a function of Leonard and his team’s relentless commitment to high-quality service,” said James Nadauld, a managing partner and founder at CHC. “We are thrilled by what the company has accomplished and have every confidence in its ability to execute on what lies ahead.”
“Linen King’s partnership with CHC came at a pivotal time for our company,” said Leonard McCullough. “The growth we realized during our time together was exceptional, and CHC’s strategic capital and value-add were critical. We’re grateful for our time as partners and continue to be excited about what’s next for our company.”
Stephens Inc. was the sell-side advisor to CHC on this transaction.
© 2020 Private Equity Professional | February 20, 2020
