Live Deals: GTCR Cleans Up Laundry Company –

The second time’s a charm for GTCR Golder Rauner LLC, a Chicago-based private equity firm, which came to an agreement with Coinmach Laundry Corp. this month to take the company private.

This is GTCR’s second attempt at taking Coinmach private. An agreement made in October 1999, valued at approximately $151.25 million ($13 per share), fell through this February. GTCR, an investor in Coinmach since 1995, currently holds a 23% stake in the company. “We got to a point in the last twelve months where we felt that the public market didn’t value the company as much as we did,” said Dave Donnini, a principal at GTCR. “We think it’s an exciting company to own.”

Coinmach is the largest laundry company in the U.S., outsourcing laundry equipment to apartments, universities, public housing and the military.

GTCR, through its holding company CLC Acquisition Corp., leads an investor group including Coinmach management, J.P. Morgan Asset Management and the Government of Singapore, to buy approximately 13.2 million shares of outstanding stock for $14.25 per share in cash for a total value of approximately $188 million. The deal is expected to close in early July.

GTCR tends to be a longer term investor in comparison with many other private equity firms, said Donnini, paricularly with a company like Coinmach that has a dominant market position and consistent cash flow. GTCR plans to hold on to the company for the long haul, while still trying to be opportunistic in managing the investment, he said.

In terms of Coimach’s growth, GTCR plans to “keep doing what we do well”, says Donnini, “grow the business in terms of units, selectively make very synergistic acquisitions, and pursue other sources of revenue.”

The company, based in Long Island, N.Y., generated $394.3 million in revenue last year. With the announcement of the merger, Coinmach’s share price climbed to $13.69, reaching a 52-week high, from $7. The investment will be made from the GTCR Fund VII, which closed in January at $2 billion.

“It’s a great company; it’s been very good to [GTCR]. We have tremendous confidence and expect it to be a great investment,” Donnini said.