Mac-Gray purchased California-based Web Service Company

Mac-Gray Corporation, a leading provider of innovative laundry facilities management services to apartment properties, condos, hotels, and other multi-housing locations, and the largest provider of such services to college and university residence halls, announced its purchase of the eastern U.S. operations of Web Service Company, a privately owned laundry facilities contractor headquartered in Redondo Beach, California.

Under the terms of the agreement, Mac-Gray purchased Web Service Company’s assets and laundry facility contracts located in 13 eastern and southeastern states and the District of Columbia. As part of the transaction, Mac-Gray sold to Web Service Company its equipment and contracts in several western states. The transaction is expected to generate approximately $29 million in net incremental annual revenue for Mac- Gray. The net purchase price of $39 million was paid in cash, and is subject to certain post-closing adjustments. The transaction is expected to be immediately accretive.

"By every measure, this is the largest purchase in Mac-Gray’s 77-year history," said Stewart G. MacDonald, chairman and chief executive officer of Mac-Gray. "The addition of Web’s eastern operations is a meaningful step in achieving one of our key strategic objectives, which is to increase our density in targeted markets in the eastern United States through acquisitions. The transaction strengthens our position as a premier provider to the apartment and condominium markets in the East. It also includes the addition of 45 accounts to Mac-Gray’s portfolio of approximately 400 college clients, further strengthening our leading position as the largest provider to the academic market. As a result, Mac-Gray will be able to better concentrate its resources on delivering high quality services more efficiently to these markets."

William E. Bloomfield, Jr., chief executive officer of Web Service Company, said, "Web Service’s decision to divest its eastern operations reflects our long-term strategy to focus on and reallocate financial and human resources to our primary markets in the central and western U.S. However, to move forward, we needed a partner that shared our commitment to integrity in dealing with customers and employees, to providing quality service, and to leading the industry with technology innovations."