Competition Watchdog Stalls Kings Laundry Takeover

10 Jan 2019 | 09.45 am

Competition Watchdog Stalls Kings Laundry Takeover

CCPC launches Phase 2 investigation

10 Jan 2019 | 09.45 am

Entrepreneur Robert McGovern will have to wait a big longer for a bumper payday as the Competition and Consumer Protection Commission carries out a full investigation into the proposed acquisition of Kings Laundry.

The purchase of the business by French laundry services multinational Elis SA was notified to the CCPC on 7 August 2018.

Kings Laundry specialises in linen hire to hotels and hospitals. It was established by McGovern in 2000 when he was 27-years-old, and opened a plant in Tallaght in 2005.

A second facility followed at Little Island in Cork in 2016. The company says it spends €5m a year purchasing new linen, sourcing its supplies from Egypt, Pakistan and Turkey.

The business ramped up substantially with the Cork plant, with an €8.4m investment in equipment. Turnover increased by 20% in 2016 to €23.4m, and by 33% through 2017 to €31.2m. The company’s gross profit in 2017 was €5.8m, a margin of 18.6%, and net profit for the year was €2.9m.

Year-end assets had an estimated value of €27.8m and liabilities amounted to €12.7m. Employment at Kings Laundry increased from 347 to 477 people through 2017, and average staff pay was €21,900.

Deal consideration for the Ellis was not disclosed at the time, with press reports speculating on a figure of €22m to €30m.

Elis specialises in the rental and maintenance of linen, professional garments and hygiene and wellness equipment across Europe and Latin America. In Ireland, the Elis subsidiary Berendsen Ireland Ltd provides rental and maintenance of workwear, linen, mops, mats, workwear for organisations’ operating cleanrooms, and provision of washroom supplies.

The CCPC stated: “Following a preliminary investigation, the CCPC has determined that a full investigation is required to establish if the proposed transaction could lead to a substantial lessening of competition in any market for goods or services in the state.”

 

Photo: Robert McGovern (right) with minister Simon Coveney (left) at the Cork laundry plant

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