MIAMI — Commercial laundry equipment distributor EnviroStar Inc. (EVI) reports it has executed a definitive asset purchase agreement to acquire substantially all of the assets of California-based Western State Design LLC, also a distributor of commercial, industrial and coin-operated laundry products, and provider of installation and routine maintenance services.
Closing of the transaction is subject to certain conditions, including financing. Pursuant to the agreement, the purchase price is $28 million, of which $18 million will be paid in cash at closing—which is expected to occur by mid-October—and $10 million in shares of EVI’s common stock.
EVI’s stock price rose 36% and to a 52-week high on Sept. 8, the day the deal was announced.
Founded in 1974 and based in Hayward, Calif., Western State Design distributes a comprehensive line of commercial and industrial laundry equipment and related parts for new laundry facilities and to the replacement laundry market. It distributes certain commercial laundry brands on an exclusive basis within California, Oregon, Washington, Alaska, and parts of Nevada, Arizona and Idaho.
It will operate as a wholly owned subsidiary of EVI under its current name, from its present West Coast locations, led by its existing management team and employees, and with the added benefit of EVI’s support and resources to assist Western in execution of its growth plans.
Additionally, with the closing, Dennis Mack, Western State Design president, will be named a director and executive officer of EVI. Tom Marks, Western State Design executive vice president, will also become an executive officer.
“On behalf of the entire team at Western State Design, we are very pleased to be joining the EVI family of commercial laundry businesses,” Mack and Marks said in a joint statement. “EVI’s goal of becoming the industry’s largest and most versatile commercial laundry products distributor and service provider is promising, and we are aligned with EVI’s business plans and long-term growth strategy.”
“We are thrilled to welcome Dennis Mack, Tom Marks, and all of the employees of Western State Design to the EVI family,” says Henry M. Nahmad, EVI chairman and CEO. “We recognize that Western State Design’s success is based on a thriving entrepreneurial culture, strong customer relationships, dedicated employees, and a commitment to exceptional service.
“For those reasons and others, we believe that the addition of Western State Design to the EVI family will benefit EVI and its customers, employees and stockholders.”
EnviroStar, which has served the laundry industry since 1959, also distributes drycleaning equipment, industrial boilers, and related parts, supplies and technical services.
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