EDMONTON, AB, Nov. 1, 2023
/CNW/ - K-Bro Linen Inc. ("K-Bro" or the
"Corporation") (TSX: KBL) today announced that it has
successfully completed its acquisition of Buanderie Villeray and
its affiliate Buanderie La Relance (together "Villeray") for an
enterprise value of $11.5 million and
a potential earnout of $1
million. Villeray is a private laundry and linen
operator centrally located in Montréal and serving the healthcare
and hospitality markets with annual revenues of approximately
$10 million. K-Bro will invest a
further $5 million in capital
expenditures to expand capacity and enhance operational
efficiencies, enabling our Montreal business to significantly and
profitably grow. As part of the transaction, K-Bro will close
its Granby facility and
consolidate its volumes into Villeray. K-Bro anticipates that the
integration of its existing Granby
operations into Villeray will be completed by the end of Q2 2024.
The purchase price and capital expenditures will be satisfied by
drawing down on K-Bro's revolving credit facility.
"Our acquisition of Villeray enhances K-Bro's position within
the attractive Montréal market. Villeray's modern plant is
strategically located in close proximity to customers, and we are
investing to expand capacity, consolidate volumes, enhance
operating efficiency, reduce fixed costs and support significant
growth opportunities," said Linda
McCurdy, President and Chief Executive Officer at
K-Bro.
"The Villeray acquisition is another example of our strategy of
acquiring high-quality operators with leading market positions
enabling K-Bro to grow market share in key regions. As we emerge
from the pandemic, we are excited about our outlook. We continue to
have an active M&A pipeline and remain well-positioned
from a balance sheet and liquidity perspective to fund
acquisitions, organic growth and our normal course issuer bid."
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 nine processing facilities and two
distribution centres under three distinctive brands, including
K-Bro Linen Systems Inc., Buanderie HMR and Les Buanderies
Dextraze, in ten Canadian cities: Québec City, Montréal,
Toronto, Regina, Saskatoon, Prince
Albert, Edmonton,
Calgary, Vancouver and Victoria.
Fishers, acquired by K-Bro in 2017, was established in 1900 and
is an operator of laundry and linen processing facilities in
Scotland. Fishers provides 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 East of England. The company
operates five sites with facilities in Cupar, Perth,
Newcastle, Livingston,
Inverness and Coatbridge.
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.sedar.com; the System for Electronic Document
Analysis and Retrieval ("SEDAR").
K-Bro est le plus important propriétaire et exploitant de
buanderies au Canada. K-Bro
fournit une gamme étendue de services de buanderie aux
établissements de soins de santé, hôtels et autres clients
commerciaux. K-Bro exploite actuellement neuf usines et deux
centres de distribution sous trois entités distinctes, incluant
K-Bro Linen Systems Inc., Buanderie HMR et Les Buanderies Dextraze,
dans dix villes canadiennes: Québec, Montréal, Toronto, Regina, Saskatoon, Prince
Albert, Edmonton,
Calgary, Vancouver et Victoria.
Vous pouvez obtenir des renseignements supplémentaires sur la
Société, y compris les documents déposés auprès des autorités de
réglementation, sur notre site Web, au www.k-brolinen.com et sur le
site Web des autorités canadiennes en valeurs mobilières au
www.sedar.com, via le Système électronique de données, d'analyse et
de recherche (« 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 (a)
the possibility of undisclosed material liabilities, disputes and
contingencies, (b) challenges or delays in integrating the targets
(c) the diversion of management's time and focus from other
business concerns, and (d) the use of resources that may be needed
in other parts of our business; (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 and the risks associated with
maintaining short term contracts which are characteristic of the
Villeray business ; (v) increased capital expenditure requirements,
including any upgrades to the Villeray facilities and increased
interest expense associated with drawdowns under K-Bro's credit
facility to satisfy the Villeray purchase price and anticipated
capital expenditures; (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, 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 (viii) the availability and terms 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
Amended Credit Facility 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.
SOURCE K-Bro Linen Inc.