Johnson Service Group has bought Essex-based Fresh Linen Holdings Limited for a cash consideration of £12.5m.
The Cheshire-based textile services provider said the acquisition was completed on November 30, 2019, in a trading update for the year ended December 31.
The acquired business, which provides managed linen and towel services, has 340 employees and operates from its main site in Clacton-on-Sea and through a transport distribution hub in Rainham, London.
It supplies over 900,000 items of linen a week, mostly to hotels and gym clubs in the hospitality market in the south east, it said.
Peter Egan, Johnson Service Group CEO, said: “This has been a strong trading period despite the general uncertainty in the UK economy.
“We have achieved consistent organic growth and, with this latest acquisition in the south east, are expanding into a new geographical area where we are currently under represented for servicing our high volume linen customers.”
Alongside the acquisition announcement, the group said its £10m investment plan in a new linen plant in Leeds is on target to open in the Spring.
Mr Egan said: “We are delighted that 2020 will see the opening of the new plant in Leeds providing further capacity and are confident that with these new geographies, our established client base and operational expertise, we will continue to deliver future organic growth.”
The group said it expects to announce full-year results – due to be published on March 2 – slightly ahead of market expectations.
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