May 13, 2014, GREENWICH, CT –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 Royal Hospitality Services, Inc. (“Royal”) through its portfolio company AC Linen. Royal is the market leader for outsourced hospitality laundry services in Boston, providing a full suite of services to many of the city’s largest hotels as well as several health clubs, universities and restaurants. The consolidated company will enjoy a leading competitive position in each of its markets, operating 6 facilities that service more than 120 customers in 5 states and process over 500,000 pounds of laundry per day. Customers include leading hospitality clients which range from 200-room hotels to 2,000-room casino resorts. The existing members of the Royal management team will continue in their current roles and report to the Co-Chief Executive Officers at AC Linen.
AC Linen Co-Chief Executive Officer Eric Goldberg said, “As we sought to expand our reach into new markets and grow the company, we wanted to be particularly mindful of corporate culture and customer service. Our employees and our clients are the heart and soul of our business and Royal was a perfect fit for us from that perspective. We have known and respected the Royal team for many years and, like us, they have a real family-like environment with respect to not only how they treat their team members but also how they become true partners with their clients. Our two companies are very similar in that regard and accordingly it made a lot of strategic sense to join forces.”
“When we acquired AC Linen as a platform for our consolidation of the hospitality-focused commercial laundry sector, Royal was at the top of our add-on acquisition list,” said Mike Odrich, a Founding Partner of A&M Capital. “Not only do both companies have very strong leading positions in their respective markets, but the similar business models and corporate cultures coupled with the geographic proximity to one another made the acquisition that much more desirable from a synergy and integration perspective, the coordination of which will be led by our partners at Alvarez & Marsal in partnership with company management. This acquisition truly solidifies our company’s position as the leading hospitality-focused player on the east coast.”
The debt financing for the transaction was provided by AC Linen’s incumbent lender, Madison Capital Funding LLC. A&M Capital was advised by Katten Muchin Rosenman LLP. Royal was advised by Goodwin Procter LLP.
Founded in 2005, Royal enjoys the leading hospitality-focused market position in Boston. Their 80 customers range from Boston’s largest high-end properties such as the Ritz Carlton and Mandarin Oriental to the Boston Sports Club properties as well as various universities and restaurants. Similar to AC Linen, Royal enjoys long-term contracts with strong termination protections and favorable economic terms. The company processes over 200,000 pounds per day of laundry out of its 70,000 sq. ft. facility in Somerville, MA, strategically located in close proximity to downtown Boston. In addition to Massachusetts, the company also services customers throughout the greater New England region.
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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