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.