EDMONTON, AB, June 21, 2024 /CNW/ - K-Bro Linen Inc. ("K-Bro" or the "Corporation") (TSX: KBL) today announced that it has successfully completed its acquisition of Buanderie C.M. Inc. ("C.M.") for an enterprise value of $12 million, on a cash-free, debt-free basis. The transaction includes the real estate for C.M.'s processing and storage facilities located in North Montréal. The acquisition is being funded entirely from K-Bro's syndicated revolving credit facility and, after synergies, is expected to be accretive to the Corporation.
C.M. is a private laundry and linen operator located in Montréal and serving the healthcare market with annual revenues of approximately $7.3 million. The acquisition will enable K-Bro to operate with two facilities in Montreal to service its growing healthcare and hospitality business.
"K-Bro is proud to serve Quebec and we are excited to further diversify our customer base in the province. C.M. has been serving top-tier healthcare customers in the attractive Montréal market for decades. Our acquisition of C.M. expands K-Bro's healthcare customer base, increases healthcare volumes, adds additional healthcare capacity, and supports significant future growth opportunities," said Linda McCurdy, President and Chief Executive Officer at K-Bro.
"The C.M. acquisition aligns with our strategy of acquiring high-quality operators. We're excited about our outlook and have an active M&A pipeline. K-Bro remains well positioned from a balance sheet and liquidity perspective and will continue to be disciplined as we evaluate acquisitions."
CORPORATE PROFILE
K-Bro is the largest owner and operator of laundry and linen processing facilities in Canada. K-Bro provides a comprehensive range of general linen and operating room linen processing, management and distribution services to healthcare institutions, hotels and other commercial accounts. K-Bro currently operates ten processing facilities and two distribution centres under two distinctive brands, including K-Bro Linen Systems Inc. and Buanderie HMR, in ten Canadian cities: Québec City, Montréal, Toronto, Regina, Saskatoon, Prince Albert, Edmonton, Calgary, Vancouver and Victoria.
Fishers, which K-Bro acquired in 2017, was established in 1900 and is an operator of laundry and linen processing facilities in Scotland, providing linen rental, workwear hire and cleanroom garment services to the hospitality, healthcare, manufacturing and pharmaceutical sectors. Fishers' client base includes major hotel chains and prestigious venues across Scotland and the North of England. The company operates in Scotland and the North of England with facilities in Cupar, Perth, Newcastle, Livingston and Coatbridge.
Shortridge, which K-Bro acquired in 2024, has operated as a family run business since the 1990s and is based in Cumbria, with plants in Lillyhall, Dumfries and a distribution depot in Darlington. It specializes in providing high quality laundry services to local independent hospitality businesses, including hotels, B&Bs, self-catering units and restaurants.
Additional information regarding the Corporation including required securities filings are available on our website at www.k-brolinen.com and on the Canadian Securities Administrators' website at www.sedarplus.ca ("SEDAR+").
FORWARD LOOKING STATEMENTS
This news release contains forward-looking information that represents internal expectations, estimates or beliefs concerning, among other things, future activities or future operating results and various components thereof. The use of any of the words "anticipate", "continue", "expect", "may", "will", "project", "should", "believe", and similar expressions suggesting future outcomes or events are intended to identify forward-looking information. Statements regarding such forward-looking information reflect management's current beliefs and are based on information currently available to management.
These statements are not guarantees of future performance and are based on management's estimates and assumptions that are subject to risks and uncertainties, which could cause K-Bro's actual performance and financial results in future periods to differ materially from the forward-looking information contained in this news release. These risks and uncertainties include, among other things: (i) risks associated with acquisitions, including the possibility of undisclosed material liabilities; (ii) K-Bro's competitive environment; (iii) utility costs, minimum wage legislation and labour costs; (iv) K-Bro's dependence on long-term contracts with the associated renewal risk; (v) increased capital expenditure requirements; (vi) reliance on key personnel; (vii) changing trends in government outsourcing; (viii) changes or proposed changes to minimum wage laws in Ontario, British Columbia, Alberta, Quebec, and the United Kingdom, which could have an adverse effect on expenses in respect of employees situated in those jurisdictions. While a portion of such expenses may be passed on to or be recoverable from customers, there can be no assurances that that will occur and (ix) the availability of future financing. Material factors or assumptions that were applied in drawing a conclusion or making an estimate set out in the forward-looking information include: (i) volumes and pricing assumptions; (ii) expected impact of labour cost initiatives; and (iii) frequency of one-time costs impacting quarterly and annual financial results; and (iv) the level of capital expenditures. Although the forward-looking information contained in this news release is based upon what management believes are reasonable assumptions, there can be no assurance that actual results will be consistent with these forward-looking statements. Certain statements regarding forward-looking information included in this news release may be considered "financial outlook" for purposes of applicable securities laws, and such financial outlook may not be appropriate for purposes other than this news release. Forward looking information included in this news release includes, without limitation, the terms and conditions of the acquisition and the credit agreement and the expected revenues, earnings, growth opportunities following the closing of the acquisition and statements with respect to future expectations on margins and volume growth.
All forward-looking information in this news release is qualified by these cautionary statements. Forward-looking information in this news release is presented only as of the date made. Except as required by law, the Corporation disclaims any intention or obligation to update or revise any forward-looking statements to reflect subsequent events or circumstances.
Web: www.k-brolinen.com
SOURCE K-Bro Linen Inc.
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