K-Bro Completes Transformational Acquisition of Fishers Topco Ltd.
27 Nov, 2017, 13:29 ET
EDMONTON, Nov. 27, 2017 /CNW/ - K-Bro Linen Inc. ("K-Bro" or the "Corporation") today announced that it has successfully completed the previously announced £35 million (prior to any earn-out consideration that may become payable on incremental EBITDA (subject to certain adjustments and a fixed linen expense of 11.4% of revenue) in excess of £5.0 million for the fiscal year ending December 31, 2017) acquisition (the "Acquisition") of Fishers Topco Ltd. ("Fishers"), a leading commercial laundry business in Scotland and the North East of England providing linen and garments primarily to the hospitality sector.
The Acquisition was funded through K-Bro's amended senior secured revolving credit facility of C$100 million (the "Amended Credit Facility"). K-Bro expects to close its previously announced offering of 804,000 common shares ("Shares") at a price of $37.35 per Share for gross proceeds of $30,029,400 (the "Offering") on or about December 12, 2017. The offering was conducted on a bought deal basis by a syndicate of underwriters led by TD Securities Inc. The net proceeds from the Offering will be used to partially pay down indebtedness that was incurred under K-Bro's Amended Credit Facility to fund the Acquisition and to pay certain fees and expenses related to the Acquisition. K-Bro has granted the syndicate an over-allotment option, exercisable for a period of 30 days following the closing of the Offering, to purchase up to an additional 120,600 Shares which, if exercised, would increase the gross Offering size to $34,533,810, to cover over-allotments, if any, and for market stabilization purposes.
"We very much appreciate the enthusiastic support and interest that we have received from the capital markets and our customers since we announced the Acquisition. We believe the reaction reflects the transaction terms and Fishers growth opportunity," said Linda McCurdy, President & Chief Executive Officer of K-Bro. "We look forward to leveraging Fishers' market leading position, experienced local management team, entrenched customer relationships and proven track record of stable and profitable operations."
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 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 East of England. The company operates seven sites, including one depot, in Scotland and the North East of England 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 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, 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 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, conditions, timing and completion 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.
For further information: Linda McCurdy, President & Chief Executive Officer; Kristie Plaquin, Chief Financial Officer, K-Bro Linen Inc. (TSX: KBL), Phone: 780.453.5218, Email: [email protected], Web: www.k-brolinen.com
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