Michael Jones - Managing Director, Fishers Laundry Group
Michael Jones - Managing Director, Fishers Laundry Group

Fishers to be acquired by Canada-based K-Bro for £35m

Fishers Laundry Group, the Cupar-based commercial laundry and textile rental provider in Scotland and the North East of England, has entered into an agreement to be acquired by K-Bro Linen Inc., the largest provider of laundry and linen services in Canada.

K-Bro has agreed to acquire 100% of Fishers’ parent company, Fishers Topco Limited, from its major shareholder, the private equity firm, Caird Capital, and a number of individual minority shareholders for a consideration of £35 million, in addition to an earn-out consideration based upon full year EBITDA. The transaction is expected to complete on 27th November, 2017.

Fishers generated revenue of £34.3million and EBITDA of c.£5m for the trailing twelve month period ended 30 September 2017.

K-Bro plans to use its acquisition of Fishers as a platform from which to build its presence in the UK commercial laundry and textile rental market by taking advantage of organic growth and consolidation opportunities.  Fishers will operate as a standalone, wholly owned subsidiary of K-Bro and will retain its headquarters in Cupar, Fife.  The Fishers management team will remain with the business and there are no headcount reductions planned as part of the acquisition.

Fishers was established in 1900 and now cleans, irons and delivers more than two million items a week employs 800 staff across seven sites in Scotland and the North East of England and provides commercial laundry and textile rental services principally to the hospitality sector but also to a range of other sectors including healthcare, manufacturing and pharmaceutical.

Fishers has also developed the innovative ZHEN® luxury linen range incorporating radio frequency identification (RFID) tags in the linen, allowing customers and Fishers to track linen effectively, enabling groundbreaking new operational and stock control efficiencies.

Headquartered in Edmonton, Alberta, K-Bro is listed on the Toronto Stock Exchange and employs over 1,600 people in nine processing facilities and two distribution centres in 10 cities across Canada. 75% of its business comes from long-term healthcare contracts with the remainder of its revenues coming from the hotel sector and other commercial contracts.

Michael Jones, Managing Director of Fishers, said:

“This is great news for Fishers as it brings a new owner for the business with the resources, experience and ambition to take Fishers to the next level.  I am confident that, as part of K-Bro, Fishers will thrive and I look forward to drawing on K-Bro’s experience, particularly in the Canadian healthcare sector, to help us grow the Fishers business further here in the UK.”

Linda McCurdy, President and Chief Executive Officer of K-Bro, said:

“We are very excited to add the Fishers platform as K-Bro’s first acquisition outside of Canada. The UK linen hospitality market is mature, but still highly fragmented, and we expect to leverage Fishers’ leading market position, experienced local management team, entrenched customer relationships and proven track record of stable and profitable operations to take advantage of the significant organic growth and consolidation opportunities available to us, similar to what we have achieved in Canada.”

PwC’s Corporate Finance team based in Scotland provided lead advisory services to the shareholders of Fishers. PwC Tax also provided sell-side tax advice to Fishers.

Jon Shelley, head of Corporate Finance for PwC in Scotland said:

“PwC is delighted to advise the shareholders of Fishers on this successful transaction.  K-Bro presents a great home for the business and its employees, and will help support the company through the next phase of its growth.  The deal represents an excellent example of the attractiveness of Scottish businesses to overseas investors”

The deal is expected to close in the week commencing 27 November 2020, and is subject to customary closing conditions.