TIDMJSG
RNS Number : 0337L
Johnson Service Group PLC
01 September 2023
1 September 2023
AIM: JSG
THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION
Johnson Service Group PLC ('JSG' or 'the Group')
EUR31.5 Million Acquisition of Celtic Linen in Republic of
Ireland ('the Transaction')
Johnson Service Group PLC announces that, on 31 August 2023, it
acquired the entire issued share capital of Harkglade Limited,
together with its subsidiaries Celtic Linen Limited and Millbrook
Linen Limited (together, 'Celtic Linen'). Celtic Linen services the
Republic of Ireland's Healthcare and Hotel, Restaurant and Catering
('HORECA') sectors; it is the largest linen supplier to the
Republic of Ireland's Healthcare sector and is the second largest
linen supplier to the HORECA sector.
Transaction Highlights
-- Acquisition of Celtic Linen, one of the Republic of Ireland's
leading textile services suppliers to the Healthcare and HORECA
sectors with revenue of EUR29.0 million in the financial year ended
1 January 2023.
-- Consideration, payable in cash on completion, of EUR31.5
million (GBP27.1 million[1]) on a debt free cash free basis,
subject to a locked box mechanism and a normalised level of working
capital.
-- The consideration includes EUR3.6 million in relation to two
freehold facilities utilised by the business.
-- Acquisition expected to be immediately earnings enhancing and
in-line with our stated strategy of seeking out value accretive
acquisitions and expanding our geographic coverage.
-- Further diversification of our customer base, with over 50%
of Celtic Linen's revenue derived from the Healthcare sector.
-- Celtic Linen's existing and experienced management team to
remain with the business.
Commenting on the Transaction, Peter Egan, CEO said:
"We are delighted to have completed the acquisition of Celtic
Linen, which represents a further significant step in our strategy
to expand the range and scale of services we offer. I have known
Celtic Linen for many years and have been very impressed with the
quality of the business, its reputation for excellent customer
service and the growth it has achieved in recent years. The
existing senior management team will remain with the business with
Joanne Somers, Managing Director of Celtic Linen, reporting
directly to myself. It gives me great pleasure to welcome each and
every employee of Celtic Linen to the Group."
Further Details of the Transaction
The consideration payable for the entire issued share capital of
Celtic Linen, which has been funded from the Group's existing
committed revolving credit facility, amounts to EUR31.5 million
(GBP27.1 million(1) ). The consideration payable was on a debt free
cash free basis, subject to a locked box mechanism and a normalised
level of working capital.
In addition, the terms of the Transaction include a commitment
from the Group to fund EUR1.9 million of capital expenditure that
Celtic Linen had committed to prior to the completion of the
Transaction. This state-of-the-art investment not only increases
processing efficiency and capacity, but also complements Celtic
Linen's commitment to sustainability through reduced energy
usage.
The majority shareholder of Celtic Linen was Causeway Capital
Partners, a growth focused private equity firm investing in
businesses across Ireland and the UK. Other shareholders included
Celtic Linen management.
The business, which has approximately 350 employees, operates
from two freehold facilities, the first of which is based in
Drinagh, County Wexford, with the second site based in Naas, County
Kildare. Celtic Linen is the largest linen supplier to the Republic
of Ireland's Healthcare sector and is the second largest linen
supplier to the HORECA sector. In the year ended 1 January 2023,
the top ten customers of the business accounted for approximately
25% of revenue.
Similar to many businesses within the textile services industry,
Celtic Linen was severely impacted by COVID-19 - albeit to a
somewhat lesser extent given its exposure to Healthcare.
Accordingly, trading results during the two financial years to 26
December 2021 were negatively impacted. In its most recent
financial year ended 1 January 2023, and despite the challenging
economic environment, trading performance improved significantly.
Celtic Linen's revenue, adjusted EBITDA[2] and loss before taxation
(after finance costs of EUR1.5 million), as set out in Harkglade
Limited's audited consolidated financial statements for the year
ended 1 January 2023, was EUR29.0 million, EUR4.6 million and
EUR(0.9) million respectively. Celtic Linen's gross assets as at
the same date amounted to EUR16.0 million, of which EUR15.3 million
were tangible.
In the six months to 2 July 2023, the business continued to show
significant year-on-year growth with revenue and adjusted EBITDA(2)
increasing to EUR16.7 million (six months to 26 June 2022: EUR12.0
million) and EUR3.9 million (six months to 26 June 2022: EUR1.3
million) respectively[3]. Since that date, the business has
continued to show growth with the securing of several new contracts
in both Healthcare and HORECA.
The Transaction is expected to be immediately earnings enhancing
and, in addition to collaboratively sharing best practice across
the enlarged Group, allows us to explore operational synergies with
our Northern Ireland based business, Lilliput.
Interim Results
The Group will publish its financial results for the six months
ended 30 June 2023 at 07:00 on Tuesday, 5 September 2023.
ENQUIRIES
Johnson Service Group PLC
Peter Egan, CEO
Yvonne Monaghan, CFO
Tel: 020 3757 4992/4981 (on the day)
Tel: 01928 704 600 (thereafter)
Investec Investment Banking (NOMAD) Camarco (Financial PR)
David Flin Ginny Pulbrook
Carlton Nelson Rosie Driscoll
Virginia Bull Letaba Rimell
Tel: 020 7597 5970 Tel: 020 3757 4992/4981
This announcement contains information relating to the
Transaction which is considered by JSG to constitute inside
information for the purposes of Article 7 of the Market Abuse
Regulation (EU) No 596/2014 (as it forms part of Retained EU Law as
defined in the European Union (Withdrawal) Act 2018) ("UK MAR").
Upon the publication of this announcement, via a Regulatory
Information Service, this inside information (as defined in UK MAR)
will be considered to be in the public domain.
The person responsible for arranging release of this
announcement on behalf of JSG is Christopher Clarkson, General
Counsel & Company Secretary, Johnson Service Group PLC.
[1] Using an exchange rate of EUR 1 = GBP 0.86.
[2] Adjusted EBITDA refers to operating profit before the
amortisation of goodwill and intangible assets, before charging for
any exceptional items and before charging depreciation in respect
of property, plant and equipment (for both leased and owned assets)
and textile rental items.
[3] Figures for the six months to 2 July 2023 and the six months
to 26 June 2022 are taken from Harkglade Limited's unaudited
consolidated management accounts.
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
RNS may use your IP address to confirm compliance with the terms
and conditions, to analyse how you engage with the information
contained in this communication, and to share such analysis on an
anonymised basis with others as part of our commercial services.
For further information about how RNS and the London Stock Exchange
use the personal data you provide us, please see our Privacy
Policy.
END
MSCSDAESFEDSEDA
(END) Dow Jones Newswires
September 01, 2023 02:00 ET (06:00 GMT)
Grafico Azioni Johnson Service (AQSE:JSG.GB)
Storico
Da Dic 2024 a Gen 2025
Grafico Azioni Johnson Service (AQSE:JSG.GB)
Storico
Da Gen 2024 a Gen 2025
