commercial laundry

Seaport Buys Linen King from Cimarron

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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

Alliance Laundry Systems Acquired by BDT

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Ontario Teachers’ Pension Plan (Teachers) has agreed to sell a majority interest in Alliance Laundry Systems to BDT Capital Partners.  Teachers will retain a minority interest in the company following the closing of the transaction which is expected in the third quarter.

Alliance Laundry Systems is a designer, manufacturer and marketer of commercial laundry equipment used in laundromats, multi-housing laundries and on-premise laundries. Alliance produces a full line of commercial washing machines, dryers and ironers with load capacities ranging from 12 to 400 pounds. Brand names include Speed Queen, UniMac, Huebsch, IPSO, Primus and Deli.  Certain brands of its commercial products are also sold in the consumer laundry marketplace. Alliance has revenues of approximately $725 million and has 2,700 employees. The company is headquartered northwest of Milwaukee in Ripon, WI (www.alliancelaundry.com).

Alliance was founded in 1908 and operated as an independent company until 1979 when it was acquired by Raytheon.  In February 1998, Raytheon sold the company to Bain Capital for $358 million. Teachers acquired the company from Bain in January 2005 for $450 million.

During Teachers’ term of ownership, Alliance expanded operations outside North America, to Europe, the Middle East, Africa and Latin America and entered new product segments and new end markets.  “Alliance has delivered exceptionally strong revenue and earnings growth since we acquired the company and has been a terrific investment for more than 10 years,” said Jane Rowe, Senior Vice-President of Teachers.

“Our management team will hold a significant ownership stake following the transaction and is excited by the new partnership with BDT,” said Mike Schoeb, Alliance’s President and Chief Executive Officer.  “This partnership will allow us to accelerate the execution of our growth strategy, continue to invest in new products, and strengthen the value we bring to our distribution partners.  BDT’s long investment horizon and their strategic approach to partnering positions Alliance well for the future.”

“We are thrilled to partner alongside the entire Alliance team,” said Chip Dunn, Managing Director at BDT. “Alliance has built its industry-leading position by investing in its people, innovating across its product portfolio and delivering unmatched customer service. Our long-term capital will provide a solid foundation and long runway to continue to pursue exciting growth opportunities around the world.”

Bank of America and BMO Capital Markets are joint lead arrangers for a senior secured credit facility to back the acquisition.  Morgan Stanley & Co., BMO Capital Markets, and Bank of America acted as financial advisors to Alliance.

BDT Capital Partners was founded in 2009 by former Goldman Sachs Vice Chairman Byron Trott. The firm has $8 billion of capital under management and is headquartered in Chicago (no website found).

© 2015 PEPD • Private Equity’s Leading News Magazine • 8-7-15