The country's biggest textile rental and hygiene services group, Connacht Court, has been sold to the British company Johnson Service for £28.25 million in cash as well as £5.6 million in assumed debt. The main beneficiaries of the deal are three members of the Goodbody family who own just over 50 per cent of Connacht Court and will thus net over £14 million.
The other beneficiaries are AIB Capital Markets, which will get £6.5 million back for the £2 million it invested for around 20 per cent of the Connacht Court in 1992, while venture capital group ACT will get £7.5 million back for the £2.6 million it put into the group in 1996, to acquire a stake of around 25 per cent.
Profits at Connacht Court have been modest in recent years with pre-tax profits of just £107,000 and operating profits of £524,000 in the year to October 1997 on sales of £25.2 million. The very low level of profits is understood to reflect heavy capital spending on new plant during the year, notably clean-room facilities.
This compares with pre-tax profits of £835,000, operating profits of £1.14 million and sales of £23.2 million the previous year. Industry sources said, however, that profits in the current year will be substantially higher as Connacht Court gets the benefit of the heavy capital investment in 1996 and 1997. A statement from Johnson Service said profits this year are "ahead of budget".
Connacht Court's head office is in Galway, with textile rental plants in Galway, Dublin and Belfast and specialist clean-room facilities in Galway, Spiddal and Dublin. The group operates in three main divisions.
Linen Supply of Ireland provides linen to the hospitality and healthcare markets and workwear, washroom and dustmat services to industrial and commercial customers in the Republic. LSI also has a healthcare division providing bed linen and sterile surgical packs to the healthcare sector.
CCG`s Micronclean division provides workwear rental to clean-room customers in the electronics, medical and pharmaceutical industries in both the Republic and Northern Ireland.
CCG's Belfast division, trading as Lilliput, supplies linen, sterile surgical packs, washroom and dustmat rental services to various customers in Northern Ireland. Overall, Connacht Court is understood to employ over 500 people.
The three members of the Goodbody family who have sold their controlling shareholding are chairman Mr Oliver Goodbody, deputy chairman Mr Trevor Goodbody and executive director Mr Malcolm Goodbody. Connacht Court managing director, Mr Tom Joyce, who has a small shareholding, will be staying on following the takeover.
Johnson Service chief executive Mr Richard Zerny said: "We believe our experience and operating techniques will bring significant benefits to CCG's business, especially in the workwear sector." He added that all of Connacht Court's plants have scope for expansion.
Connacht Court began in 1920 when the Goodbody family - which has links to the eponymous stockbroking and legal firms - bought a small laundry in Galway, providing a home delivery service with the help of a horse and cart. When traditional laundries began to fail in the 1970s, the company changed its emphasis to supplying linen for hospitals and the corporate sector.
