A MANUFACTURING firm which can trace its Yorkshire roots back to the 1840s has strengthened its position in the textile care sector by securing a key acquisition.
Detergents and chemicals manufacturer Christeyns UK has bought the dry cleaning and laundry consumables business Alex Reid from Johnson Service Group for £2.1m.
Christeyns, which employs 110 people at its UK head office in Bradford, is a major detergent supplier to the UK laundry market.
Managing director Nick Garthwaite said: “Through the support of Christeyns, this acquisition will enable Alex Reid to further strengthen its position in the UK dry cleaning sector.”
Mr Garthwaite said the deal would enable Christeyns to expand into other areas of textile care.
He added: “It will enable us to utilise our capacity (in Bradford)even better. I am really passionate about manufacturing in Bradford.”
Mr Garthwaite said Christeyns was always looking for suitable acquisitions.
Based in Ghent, Belgium, The Christeyns Group was established in 1946, and it has grown to become an international business with a number of divisions, including laundry technology, chemicals, food hygiene and consumer detergents.
Christeyns’ UK operation dates from 1998 when it bought the Oils & Soaps company, which was founded in Bradford in 1848.
Alex Reid has 70 staff at its sites in Leicester and Croydon.
Johnson Cleaners UK has signed a three-year supply agreement with Christeyns, on terms similar to those it had with Alex Reid, before the business was sold.
John Talbot, the executive chairman of Johnson Service Group said yesterday: “In July we announced the conclusion of a strategic review of our drycleaning business.
“As part of that review ,it was decided that Alex Reid was not a core business for the group.
“We are pleased that we have secured a multi-year agreement to continue to use the services of Alex Reid under its new ownership.”
The proceeds of the disposal will be used to reduce Johnson Service Group’s debt.
A note from Investec Securities said: “This looks a sensible deal for the (Johnson Service) group and is in line with the ongoing restructuring strategy of its drycleaning business.”
The note from Investec said Johnson Service Group’s shares had performed strongly in the past year, but “there looks to be plenty more to go for.”
Investec maintained its “buy” recommendation for Johnson Service Group’s shares, following “another positive move by management”.
“This remains a cheap stock and is well worth another look,” the Investec note said.
The Johnson Service Group already has a supplier relationship with Christeyns, through its textile rental business.
Christeyns was advised on the deal by Rob Burton, the corporate finance director at the Leeds office of international accountancy firm Mazars, and Paul Johnson, who is a partner and corporate lawyer at the Leeds office of Irwin Mitchell.
Mr Burton said: “Christeyns is a major international company with an important presence in Yorkshire.
“I am sure Alex Reid will find a secure home within it and go from strength to strength.”
Alex Reid’s total revenue for the year ended December 31 2011 was £12m, of which £3.6m related to inter-company contracts and the adjusted operating profit was £200,000.
As of June 30, 2012, Alex Reid had net assets, excluding debt and inter-company debt, of £2.3m.