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Acquisition Strengthens Mac-Grays Core Business and Complements Northeast
Operations
WALTHAM, Mass., Jan. 23 /PRNewswire-FirstCall/ -- Mac-Gray Corporation
(NYSE: TUC), the nations premier provider of laundry facilities management
services and energy-efficient MicroFridge(R) appliances to multi-unit housing
locations, today announced that it has acquired the assets of Massachusetts-
based Lundermac Co., Inc. for approximately $11.5 million in an all-cash
transaction. Founded in 1940, Lundermac is one of the oldest multi-housing
laundry system companies in the nation and one of the largest in New England.
"The acquisition of Lundermac is representative of our ongoing strategy of
reinvesting in our core business and creating a stronger foundation for
organic growth," said Stewart MacDonald, Mac-Grays chairman and chief
executive officer. "The completion of our $150 million bond offering in August
2005 was intended to give us the financial flexibility to pursue acquisitions
even while we continue to invest in increasing our internal growth rate. In
the case of Lundermac, its concentration in eastern New England markets
increases our density within those areas. We anticipate that the Lundermac
acquisition will contribute approximately $8 million to our 2006 facilities
management revenue and be accretive in the first quarter of 2006."
"We have known Mac-Grays exceptional service offerings and outstanding
reputation in the marketplace for a very long time," said Joseph Shapiro,
president of Lundermac. "We know that Mac-Grays commitment to corporate
integrity, service, and technology is a perfect fit for our customers."
About Mac-Gray Corporation
Founded in 1927, Mac-Gray derives its revenue principally through the
contracting of debit-card- and coin-operated laundry facilities in multi-unit
housing facilities such as apartment buildings, college and university
residence halls, condominiums and public housing complexes. Mac-Gray contracts
its laundry rooms under long-term leases. These leases typically grant Mac-
Gray exclusive contract rights to laundry rooms on the lessors premises for a
fixed term, which is generally seven to 10 years, in exchange for a negotiated
portion of the revenue collected. Mac-Gray manages approximately 64,000
laundry rooms located in 40 states and the District of Columbia.
Mac-Gray also sells, services and leases commercial laundry equipment to
commercial laundromats and institutions through its product sales division.
This division also includes Mac-Grays MicroFridge(R) business, where Mac-Gray
sells its proprietary MicroFridge(R) line of products, which are combination
refrigerators/freezers/microwave ovens utilizing patented Safe Plug(TM)
circuitry. The products are marketed throughout the United States to colleges,
the federal government for military housing, hotels and motels, and assisted
living facilities. MicroFridge(R) also has entered into agreements with Maytag
Corporation to market Maytags Magic Chef(R), Amana(R) and Maytag(R) lines of
home appliances under its MaytagDirect(TM) program throughout the United
States. MicroFridge(R) and Maytag(R) products bear the ENERGY STAR(R)
designation. To learn more about Mac-Gray, visit the Companys website at
http://www.macgray.com.
Intelligent Laundry Solutions(TM), Intelligent Laundry Systems(TM),
LaundryView(TM), PrecisionWash(TM) and MaytagDirect(TM) are trademarks of Mac-
Gray Corporation. MicroFridge(R) is a registered trademark of Mac-Gray
Corporation. All other product names, service marks and trademarks mentioned
herein are trademarks of their respective owners.
Safe Harbor Statement
This news release contains certain forward-looking statements within the
meaning of Section 27A of the Securities Act of 1933, as amended, and Section
21E of the Securities Exchange Act of 1934, as amended, including statements
regarding the Companys estimates of the performance of the business acquired
from Lundermac. The Company intends such forward-looking statements to be
covered by the Safe Harbor provisions for forward-looking statements contained
in the Private Securities Litigation Reform Act of 1995, and including this
statement for purposes of complying with these Safe Harbor provisions.
Forward-looking statements, which are based on certain assumptions and
describe future plans, strategies and expectations of the Company, may be
identified by use of the words, "believe," "expect," "intend," "anticipate,"
"estimate," "project," or similar expressions. Investors should not rely on
forward-looking statements because they are subject to a variety of risks,
uncertainties and other factors that could cause actual results to differ
materially from such forward-looking statements. Certain factors which could
cause actual results to differ materially from the forward-looking statements
include, but are not limited to, the Companys ability to successfully
integrate the acquired assets and operations of Lundermac Co., Inc. as well as
the risks that the Company will incur unanticipated costs related to the
acquired operations or not realize expected revenues, synergies and cost
savings, and those risks set forth in the Companys Annual Report on Form 10-K
for the year ended December 31, 2004 under "Managements Discussion and
Analysis of Financial Condition and Results of Operations" and in other
reports subsequently filed with the Securities and Exchange Commission.
Contacts:
Michael J. Shea
Chief Financial Officer
Mac-Gray Corporation
781-487-7690
Email: mshea@macgray.com
Jim Buckley
Executive Vice President
Sharon Merrill Associates, Inc.
617-542-5300
Email: jbuckley@investorrelations.com
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