Gresham reunited with clothing rental business

The UK mid-market firm is helping the corporate owner of Johnson Clothing deleverage, as it attempts to reap returns for a second time from the company.

UK mid-market buyout firm Gresham has bought Johnson Clothing, a company it has previously owned, for £82.5 million ($164 million; €104 million) from the Johnson Service Group.

The company will be renamed Dimensions Clothing, its original name when it was owned by Gresham from December 2000 to July 2004. In 2000 Gresham also bought the clothing rental business originally from Johnson.

Since 2004 Johnson made a number of acquisitions for the business. The company now processes 1 million garments per month to customers such as UK banks HBoS and Lloyds TSB, UK retailer Marks & Spencer, the NHS, the UK’s health service, postal service the Post Office and the supermarkets  Sainsbury’s and Tesco.

Paul Franks, a partner at Gresham, said: “It’s a company we know and a market we know well but through the acquisitions it’s a different business to the one we had and a market leader by some margin.”

Franks said: “They’re undertaking a debt reduction exercise and we’re acquiring this to invest in it – there is a clear rationale for a change of ownership. This is the UK market leader in the supply of corporate clothing and the plan is to concentrate this even further.” He said Gresham is looking to grow the business organically by offering clothing outsourcing to more customers, specifically the public sector where there has been less uptake of the services.

The deal is subject to shareholder approval.

KPMG Corporate Finance’s Midlands team advised Gresham and the management team. Debt facilities were provided by Lloyds TSB, Barclays, HSBC and Royal Bank of Scotland.

The uniform rental business has attracted numerous buyouts. Last summer listed French investment firm Eurazeo bought uniform rental agency Elis from rival buyout firm PAI Partners for €2.28 billion ($1.8 billion). The bid provided an exit for PAI after six years of ownership.