Teacher’s Private Capital, the principal investment arm of the C$79 billion (€49 billion; $64 billion) Ontario Teachers’ Pension Plan, has agreed to acquire Alliance Laundry Systems from Boston-based Bain Capital Partners in a $450 million buyout.
Alliance, which is based in Ripon, Wisconsin, makes commercial laundry products and equipment and owns brands including Speed Queen, UniMac, Huebsch and Ajax.
In March this year, the company filed for in IPO of Income-Deposit Securities (IDS) in the US. After meeting with unfavourable market conditions, Alliance and its private equity owners took the decision to pursue a private sale of the business instead.
The March offering was the second time that Alliance had tried and failed to go public. In 2002, a move to list in Canada also stalled.
Commenting on the deal, Jim Leech, who runs Teachers’ Private Capital, was quoted in reports as saying that weak demand for new offerings in the IDS market provided Teachers’ with interesting opportunities. Teachers’ was 'busy fishing in the waters' for assets that could not be taken public, Leech told the National Post, the Canadian newspaper.
For Teachers’, it is the first time it leads a private equity investment on US soil. The Toronto-based outfit runs a C$4.5 billion investment portfolio and is a highly regarded private equity fund investor. The group also co-invests directly in private equity transactions.
On its website, Teachers’ references investments in over 100 companies and 25 private equity funds since 1991 and says it has realised a return in excess of 25 per cent per annum since inception.
Bain invested in Alliance in 1998 when it purchased the company alongside private equity investor Buckman Rosser Sherrill and management for $330 million in a leveraged buyout from Raytheon, the defence group.
According to the National Post, Bain invested approximately $30 million for a 55 percent stake in Alliance and stands to make an estimated IRR of 175 percent on its investment. The deal is expected to close in February 2005.
Teachers’ was advised by a team of private equity lawyers at New York-based attorneys Debevoise & Plimpton led by Margaret Davenport.