Textile services and facilities management provider Johnson Service Group has sold its shares in dry cleaning subsidiary Alex Reid for a cash consideration of 2.1m pounds.
The proceeds from the sale of shares, which were sold to detergent supplier Christeyns UK on a debt-free basis, will be used to reduce the company's debt.
The consideration is subject to adjustments to reflect the actual net assets of Alex Reid at completion.
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The total revenue of Alex Reid for the year ending December 31st 2011 was £12.1m of which £3.6m was related to inter-company contracts. Adjusted operating profit was £0.2m.
As of June 30th 2012, Alex Reid had net assets excluding debt and inter-company debt, of £2.3m.
Johnson Cleaners UK, Johnson Services Group's retail dry cleaning business has signed a three years supply agreement with Christeyns on terms similar to those in operation between Alex Reid and Johnson Cleaners prior to the disposal.
Commenting on the disposal, John Talbot, Executive Chairman of Johnson Service Group, said: "In July we announced the conclusion of a strategic review of our dry cleaning business. As part of that review, it was decided that Alex Reid was not a core business for the group going forward. We are pleased that we have secured a multi-year agreement to continue to use the services of Alex Reid under its new ownership."
Shares in Johnson Services Group were down 0.37% to 33.62p per share at 12:50 on Thursday.
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