Downer’s Spotless Laundry Sale Scrapped

It’s back to square one for Downer EDI so far as the sale of its Spotless laundry and garment businesses after the private equity-owned suitor, South Pacific Laundry (SPL) withdrew its request for a merger approval.

South Pacific said it had decided not to proceed with the transaction.

Spotless Laundries is part of Spotless Group Holdings Limited which is wholly-owned by Downer EDI.

Downer shares lost 1.7% to $4.53 on the ASX yesterday.

Spotless Laundries and SPL both offer commercial laundry services in multiple cities and regions across Australia.

The ACCC began its informal merger review in May of this year and expressed preliminary concerns about the transaction in late August.

The ACCC’s investigation indicated that Spotless Laundries and SPL were two of the largest commercial laundry suppliers nationally and in Adelaide, Perth, Sydney and Melbourne.

SPL and Spotless Laundries both provide hiring, cleaning and delivery services for linen and garments in multiple regions across Australia.

SPL is owned by Australian private equity firm Anchorage Capital Partners.

The ACCC also considered a separate bid by US-owned, Alsco Pty Ltd to acquire Spotless Laundries’ garment business. Alsco withdrew its bid on October 22.

Both the Spotless Laundry and garment businesses are capital intensive operations and Downer doesn’t want to remain owners as it transitions to a capital light services businesses.

About Glenn Dyer

Glenn Dyer has been a finance journalist and TV producer for more than 40 years. He has worked at Maxwell Newton Publications, Queensland Newspapers, AAP, The Australian Financial Review, The Nine Network and Crikey.

View more articles by Glenn Dyer →