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SSG Advises Clarus Linen Systems in the Sale of its Assets and Operations to Multiple Buyers
November 15, 2019
Source: SSG Capital Advisors, LLC
SSG Capital Advisors, LLC ("SSG") acted as the investment banker to Centerstone Linen Services, LLC d/b/a Clarus Linen Systems ("Clarus" or the "Company") in the sale of its assets and multiple operations to Crown Health Care Laundry Services ("Crown"), PureStar Linen Group, LLC ("PureStar"), and Clean Textile Systems, LP d/b/a CleanCare ("CleanCare"). The sales were effectuated through a Chapter 11 Section 363 process in the U.S. Bankruptcy Court for the Northern District of New York.
Headquartered in Buffalo, New York, Clarus is a leading provider of high-quality linen rental and commercial laundry services to the healthcare industry. Together with its subsidiaries, Clarus operated five production facilities in the states of New York, Georgia and South Carolina that provided daily pick-ups and deliveries to their customers.
Facing management turnover, declining revenue and operational challenges, Clarus implemented various strategic initiatives in 2017 and 2018, including contract rationalization and the closure of two plants. Additionally, cash constraints negatively impacted their ability to consistently purchase adequate linen, leading to plant inefficiencies and fulfillment issues. Ultimately, Clarus filed for Chapter 11 protection and retained SSG.
SSG conducted a comprehensive marketing process which resulted in a wide range of interest, primarily from strategic parties that focused on the individual production facilities. The process resulted in multiple offers for the operations and assets. SSG's deep industry expertise and experience running a thorough sale process created a competitive auction environment. Ultimately, offers from three separate buyers were selected as winning bids to maximize value for stakeholders. Crown purchased the Spartanburg, South Carolina and Albany, Georgia operations, CleanCare acquired the Buffalo, New York, operation and PureStar purchased assets in Atlanta, Georgia.
Crown, a portfolio company of Quilvest Private Equity, is an independent full-service health care laundry processor and linen rental company. PureStar is a provider of laundry services and linen management to the hospitality industry. CleanCare is a leading textile and linen rental service for the health care and hospitality industries.
Other professionals who worked on the transaction include:
• Ronald Teplitsky of Next Point LLC, Chief Restructuring Officer of Clarus Linen Systems;
• Stephen A. Donato, Camille W. Hill and Andrew S. Rivera of Bond, Schoeneck & King, PLLC, counsel to Clarus Linen Systems;
• Angela Z. Miller and Catherine N. Eisenhut of Phillips Lytle LLP, counsel to the senior lender;
• Mark Samson and Bert Weil of Getzler Henrich & Associates LLC, financial advisor to the senior lender; and
• David M. Banker and Gilbert R. Saydah, Jr. of Montgomery McCracken Walker & Rhodes LLP, counsel for the Unsecured Creditors Committee.
CONTACTS ON THIS DEAL
Michael S. Goodman
Robert C. Smith
Joel R. Julio
About SSG Capital Advisors, LLC
SSG Capital Advisors is an independent boutique investment bank that assists middle-market companies and their stakeholders in completing special situation transactions. We provide our clients with comprehensive investment banking services in the areas of mergers and acquisitions, private placements, financial restructurings, valuations, litigation and strategic advisory. SSG has a proven track record of closing over 350 transactions in North America and Europe and is a leader in the industry.
Securities are offered through SSG Capital Advisors, LLC (Member SIPC, Member FINRA). All other transactions are effectuated through SSG Advisors, LLC, both of which are wholly owned by SSG Holdings, LLC. SSG is a registered trademark for SSG Capital Advisors, LLC and SSG Advisors, LLC.