August 26, 2014 –Alvarez & Marsal Capital (“A&M Capital”), a middle-market private equity firm that has a strategic association with Alvarez & Marsal (“A&M”), announced today that it has acquired a majority interest in Brady Linen Services LLC (“Brady”) through a merger with its portfolio company AC Linen. Brady is the leading provider of outsourced laundry services to the hospitality sector in Las Vegas. Brady President Eric Brady has rolled a meaningful stake into the combined company and will continue to serve as President of the Brady Linen Services division, as well as Co-Chief Executive Officer of the consolidated company and member of the Board of Directors.
The transaction with Brady follows shortly after AC Linen’s May acquisition of Royal Hospitality Services, Inc., Boston’s market leader in the hospitality-focused commercial laundry sector. On a combined basis, the three companies will operate 15 facilities that service more than 200 customers in 6 states across the country (as well as in the Bahamas) and process in excess of two million pieces of laundry per day, or over 1.5 million pounds per day. The consolidated company enjoys a leading competitive position in each of its markets that include Las Vegas, Boston, Atlantic City, Norwich, CT, Philadelphia and the Bahamas.
Brady provides a full suite of hospitality laundry services to casinos, hotels and restaurants in the broader Las Vegas MSA, in which it maintains the leading market share with an especially strong position on the Las Vegas strip. The business employs approximately 1,600 people and operates nine commercial laundry facilities, serving leading hospitality clients which range from 200-room hotels to 7,000-room luxury resorts. Brady acquired its largest competitor in 2011, solidifying its leading position in the Las Vegas market.
The transaction was financed in part through a sale leaseback of the company’s owned real estate, which was provided by Angelo Gordon & Co., L.P. For A&M Capital, the transaction represented the fourth consecutive investment in a family-owned and operated business. Bill Brady, the company’s founder, used the transaction to transition ownership to his son Eric, who had been operating the business day-to-day for the past several years. Brady President Eric Brady said, “We pride ourselves in being the highest-quality operator in one of the largest hospitality markets in the world. As such, we were particularly focused on selecting a partner that shared our commitment to quality, continuous improvement and premier customer service. We found such a partner in AC Linen and couldn’t be happier about the merger. We see opportunities for mutual growth and improvement in a number of areas and believe that A&M Capital’s involvement will further help us to optimize the potential for the combined company.”
Mike Odrich, a Founding Partner of A&M Capital, said “We are particularly excited about the Brady transaction because it has elevated our linen platform company into the largest hospitality-focused commercial laundry in the country. Our initial investment thesis was to expand the footprint of our business and diversify into additional geographies across various customer types. The additions of Royal Hospitality Services and now Brady Linen Services have made this a reality, creating the only truly national business of its kind and, with the help of our partners at A&M, an integrated one with significant operating efficiencies to capture. We are proud to have created this national platform in the span of less than one year following our initial platform acquisition of AC Linen.”
The debt financing for the transaction was provided by Ares Management LLC and GE Antares Capital. A&M Capital was advised by Simpson Thacher & Barlett LLP and Katten Muchin Rosenman LLP. Brady was advised by Ballard Rawson and Deloitte.
Brady’s experience in serving the resort industry dates back to 1947. Today, Brady Linen is the leading outsourced provider of linen services to the Las Vegas hotel and gaming industry as well as in the Bahamas. The business offers pickup, cleaning, and delivery of housekeeping and foodservice linens, as well as uniform and valet dry cleaning. Services are provided through both a linen rental program as well as the cleaning of Company Owned Goods (“COG”). Like AC Linen and Royal, Brady enjoys long-term contracts with favorable contract terms. In 2011, Brady acquired the resort laundry division of Mission Industries, which added three processing facilities and approximately 600,000 pounds of daily processing volume, bringing Brady’s total daily production to approximately one million pounds per day in its nine facilities.
About A&M Capital
A&M Capital is a private equity firm which invests in middle-market businesses that can benefit from the firm’s access to significant operating resources and expertise. The firm has a strategic association with Alvarez & Marsal (“A&M”), which gives it the distinctive capability to bring the exact management or operational talent and support to the companies with which they partner. The firm is focused on investments where the investment team can help to deliver significant value to companies across a wide range of industries.
Alvarez & Marsal was founded in 1983 and is a privately-owned global professional services firm that helps businesses improve performance, solve problems, and unlock value for stakeholders. With more than 2,500 full-time professionals in 40 + offices across North America, Europe, the Middle East, Asia and Latin America, A&M is the largest firm of its kind and has expertise across all major industry sectors and functional areas.
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