Investment highlights

Celtic Linen is a leading supplier of rented linen and textiles to the healthcare and hospitality sectors, operating two energy efficient laundry plants in ROI and is led by CEO, Joanne Somers.

Causeway Capital completed the original acquisition of Celtic Linen in December 2016 via an examinership process (Irish equivalent of a US Chapter 11 process) for €4m and provided a further €4.5m of follow on investment spread over a number of years. The acquisition structure was a first for an Irish private equity investor at the time and successfully secured 270 jobs at the company’s headquarters in Wexford.

During Causeway’s investment period, the business completed a major capital investment programme to improve operating and energy efficiency, a bolt-on acquisition, and successfully grew sales from €12m to more than €29m and employment from 270 FTEs to 350 FTEs. This strong growth was achieved against the challenging backdrop of Covid-19 and energy price volatility as result of the war in Ukraine.

Outcome

Celtic Linen was acquired by Johnsons Service Group Plc (JSG) for consideration of €31.5m, representing a return of 3x for Causeway Capital. This is the second major exit for Causeway Capital Partners I (following the IPO of ecommerce business, In the Style, in 2021).

JSG is one of the leading commercial laundry operators in the United Kingdom (sales of £385m) and is listed on the AiM of the stock exchange (market cap: £500m). The acquisition by JSG is in line with its stated strategy to expand geographical reach into Ireland and diversify its customer base by accessing the healthcare sector.

Celtic Linen’s other shares were held by employee shareholders, including Joanne Somers. Joanne and her senior team will remain with the business and are set to benefit from the enhanced opportunities for Celtic Linen’s team members as part of the enlarged JSG group. As part of the transaction, JSG has agreed to complete an ongoing €1.9m capital investment programme in the group’s Wexford plant to increase efficiency and improve sustainability through reduced energy usage.

“We are delighted to have completed the acquisition of Celtic Linen…  [and] have been very impressed with the quality of the business, its reputation for excellent customer service and the growth it has achieved in recent years.”   
Peter Egan, CEO of JSG

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