K-Bro Linen Inc. Expands in U.K. with Acquisition of STAR Mayan Limited for £107.2 Million
- K-Bro Linen Inc. acquired U.K.-based STAR Mayan Limited for £107.2 million, enhancing its presence in the U.K. laundry sector.
- The acquisition adds seven facilities and strengthens K-Bro's service offerings in healthcare and hospitality industries.
- K-Bro plans to finance the acquisition through a bought deal and a term loan, maintaining shareholder value during growth.
K-Bro Linen Expands U.K. Operations with Strategic Acquisition
K-Bro Linen Inc. announces the successful acquisition of U.K.-based STAR Mayan Limited for £107.2 million, a strategic move that significantly bolsters its foothold in the U.K.'s burgeoning commercial laundry and textile rental sector, valued at £1.6 billion. This acquisition aligns with K-Bro's expansion strategy initiated in 2017 when the company first entered the U.K. market. By integrating Star Mayan's operations, which include three well-regarded brands—Synergy, Grosvenor, and AeroServe—K-Bro enhances its existing operations and aims to create a comprehensive national presence alongside its current subsidiaries, Fishers and Shortridge.
The integration plan, as outlined by K-Bro's CEO Linda McCurdy, is designed to position the company as a leading player in the U.K. market. With the acquisition of Star Mayan, K-Bro not only strengthens its service offerings in the healthcare and hospitality sectors but also expands its operational capacity with seven additional facilities located in England. This growth is expected to provide K-Bro with a competitive edge, allowing the company to leverage economies of scale, optimize service delivery, and better meet the evolving needs of its clients in both the healthcare and hospitality industries.
To finance the acquisition, K-Bro employs a dual approach, utilizing a bought deal financing strategy that involves issuing 2,334,500 subscription receipts priced at C$34.55 each, complemented by a C$134.3 million amortizing term loan. Following the completion of the acquisition, subscription receipt holders will receive common shares of K-Bro along with a cash equivalent reflecting dividends payable to common shareholders. This financial strategy not only facilitates the acquisition but also underscores K-Bro's commitment to maintaining strong shareholder value while pursuing growth opportunities in the U.K. market.
In addition to the acquisition news, K-Bro Linen faces a trading halt initiated by the Canadian Investment Regulatory Organization (CIRO) due to a pending delisting of its shares. This halt, which took effect at 8:02 AM ET on June 11, 2025, raises concerns among investors regarding the company’s compliance with regulatory standards. CIRO's decision highlights the critical role of regulatory oversight in maintaining market integrity and investor confidence.
As K-Bro Linen Inc. navigates through these developments, the company's expansion into the U.K. market through the acquisition of Star Mayan represents a significant growth opportunity, even as it contends with uncertainties surrounding its trading status in Canada.