Mac-Gray News

Mac-Gray Strengthens Operations in Maryland, Virginia and Washington, D.C.

August 9, 2007

WALTHAM, Mass., Aug 09, 2007 /PRNewswire-FirstCall via COMTEX News Network/ -- Mac-Gray Corporation (NYSE: TUC), the nation's 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 Hof Service Company for a cash purchase price of approximately $43 million, subject to certain post-closing adjustments.

Based in Beltsville, MD, and serving multi-housing clients in Washington, D.C., Maryland, and Virginia, Hof Service Company is a leading laundry facilities management services and equipment provider, as well as a distributor of commercial laundry equipment, serving the mid-Atlantic region. For the trailing twelve-months ended March 31, 2007, Hof generated approximately $27 million in revenue.

"The acquisition of Hof provides us with an excellent opportunity to profitably expand our position in the Washington, D.C., Baltimore, and Virginia markets," said Stewart G. MacDonald, Mac-Gray's chairman and chief executive officer. "With more than 50 years of experience, Hof has a first- class reputation in laundry facilities management, and their long-standing dedication to customer service aligns closely with Mac-Gray's values. The company's president Daryle Bobb and his talented team are a welcome addition to Mac-Gray. Because of their commitment to service and innovation, we believe they will be a natural fit with our organization.

"Hof's operations are highly concentrated in their markets, which made the company an attractive acquisition. Hof's client locations complement our existing footprint in the mid-Atlantic region and provide far greater density in those two key urban areas. We anticipate that the acquisition will contribute approximately $2 million in incremental monthly revenue and will be fully accretive to earnings in 2008," concluded MacDonald.

"While this is an emotional and important event for our family, we nevertheless made the decision to sell to Mac-Gray because we knew that our employees, clients, and customers would be in the best hands," said Stanley Bobb, CEO of Hof. "After more than four decades in this business, it's time to plan for the future, and I'm excited that my son Daryle and I will continue to be involved in developing the Washington, Baltimore, and Virginia markets with Mac-Gray. They have resources and technology that will only continue to improve the quality of laundry facilities management for our clients and customers, and allow us to grow our client base in the region. We are proud of what all of Hof's team players have achieved over many years, but we are also very pleased and proud that Hof is now part of Mac-Gray."

Due to its historical success and leadership position in the Washington and Baltimore markets, and well-recognized brand, the organization will continue to operate under the Hof Laundry Systems name. Daryle Bobb will join Mac-Gray as a Vice President and General Manager in these markets.

Mac-Gray is funding this acquisition with an expansion of its existing bank credit facility, which was increased from $65 million to $85 million. JPMorgan Chase Bank leads the Company's bank group. Mufson Howe Hunter & Company LLC acted as financial advisors to Hof Laundry in this transaction.

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