Private equity firm Calera Capital closed a $750 million single-asset continuation fund in connection to its sale of ImageFirst Healthcare Laundry Specialists, which provides linen, laundry, safety and hygiene services for the healthcare industry, according to a press release.
Calera said that a “significant” amount of sale proceeds were rolled into the continuation fund, which will be used to fuel ImageFirst’s expansion into new healthcare markets and adjacent services, support organic growth and develop the company’s internal infrastructure.
The PE firm says that the continuation fund, Calera Capital Image Holdings, is supported by new and returning limited partners, including funds managed by Goldman Sachs Asset Management, Blackstone Strategic Partners, TPG GP Solutions and Portfolio Advisors.
As facilities managers outsource parts of a building’s operations to meet budgets and circumvent labor shortages, laundry servicing is expected to be a growing market in an already booming healthcare industry. The hospital linen supply and management services market was estimated to be worth $10 billion in 2022, with IMARC’s recent forecast report expecting it to grow to $12.6 billion by 2028 at a compound annual growth rate of 4%.
Since Calera first invested in ImageFirst in 2018, the laundry and cleaning service firm has grown its EBITDA five-fold and expanded through a combination of organic growth, geographic market expansion and add-on transactions, per the release. During this period, ImageFirst made 25 acquisitions and grew to over 25,000 locations, with an annual customer retention rate of over 95%.
A number of moves occurred in the hospital laundry service market this year, with Healthcare Linen Services Group announcing a new headquarters in Saint Charles, Illinois, alongside a new training center designed to provide professional growth and development for employees, according to Laundry Ledger. The York Capital-funded company, which primarily provides healthcare laundry services to the Midwest and central U.S., also acquired servicer Linen King at the start of the year.
As HLSG expands south, ImageFirst continues north with its early February purchase of Island Fox Inc., a laundry processor in New York state. It also acquired Nashville-based Allegiant Linen Services in September.