Core Points - K-Bro Linen Inc. has signed a share purchase agreement to acquire STAR Mayan Limited for £107.2 million (approximately C$199.1 million), enhancing its presence in the U.K. commercial laundry market [1][3][4] - The acquisition will create a top three national platform in the U.K. commercial laundry and textile rental market, which is valued at £1.6 billion [5][7] - The deal is expected to close in early June 2025, subject to limited closing conditions [9] Company Overview - K-Bro is the largest owner and operator of laundry and linen processing facilities in Canada, providing services to healthcare institutions, hotels, and other commercial accounts [25] - The company operates eleven processing facilities across eight Canadian cities [25] - K-Bro entered the U.K. market in 2017 through the acquisition of Fishers, aiming to build a national platform for growth [4] Acquisition Details - STAR Mayan owns three operating businesses: Synergy Health Managed Services Limited, Grosvenor Contracts (London) Limited, and Aeroserve Linen Services [2][28] - The acquisition will enhance K-Bro's revenue diversification, with over two-thirds of Star Mayan's revenue focused on healthcare [7][8] - K-Bro's pro forma U.K. healthcare revenue is expected to increase to 43% from 6%, and consolidated pro forma revenue from the U.K. will rise to 51% from 30% [7] Financial Aspects - The acquisition is expected to generate anticipated run-rate synergies of £2.0 million, with cost synergies expected within 6-12 months and operational efficiencies within 24 months [13] - The purchase price represents 7.6 times trailing twelve-month (TTM) Adjusted EBITDA, including anticipated synergies [13] - K-Bro plans to finance the acquisition through a bought deal offering of subscription receipts, raising gross proceeds of C$70.1 million [10][14] Market Position - The acquisition will establish a coast-to-coast geographic footprint in both Canada and the U.K., enhancing K-Bro's market share to approximately 10% in the U.K. [7][5] - K-Bro will have a leading coast-to-coast platform in both Canada and the U.K. following the acquisition [7]