Johnson Service Group expands hotel service offer with £52.6m acquisition

Cheshire-based textile services company Johnson Service Group PLC (JSG) has taken further steps to solidify its position within the hotels sector after acquiring Afonwen Laundry Limited for £52.6m.

Having acquired Afonwen - a hotel linen supplier operating from laundry facilities in Reading, Cardiff and Pwllheli, in addition to a distribution centre in Leeds - JSG now intends to place more than 33m new shares in a bid to raise around £28.7m.

Further, to fuel its growth plans the Runcorn-based firm has secured an increased financing package of £150m with its existing banks.

JSG CEO Chris Sander said of the acquisition and placing: “I am very pleased to announce further acquisitions that increase our presence in the textile rental market and the addition of Afonwen significantly strengthens our quality and service offering within the high volume hotel linen sector.

“I have known Afonwen for many years and have been very impressed with the quality of its business, the investment in additional laundry facilities and the resultant growth achieved in recent years.”

He continued: “Its operations complement our existing high volume linen business in Bourne and Birmingham and will give us additional production facilities to serve our customers better and provide the opportunity for logistical efficiencies.”

JSG’s latest acquisition follows another transaction, announced in February, that saw it acquire Zip Textiles (Services) Limited for £15m.

Afonwen’s managing director, Mark Woolfenden, commented: “We are delighted to be joining Johnson Service Group PLC, a company which shares many of our values in delivering first class customer service and high quality linen products to the hospitality industry.

“With increasing consolidation in the UK textile rental market, the opportunity to scale up into a larger organisation and allow us to offer fully nationwide coverage was a huge attraction.”

Mark added: “We look forward to continued growth.”

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