CSC ServiceWorks to Acquire Mac-Gray for $524 Million

Staff Writer |

PLAINVIEW, N.Y. — CSC ServiceWorks Inc. (CSC) and Mac-Gray Corp. have entered into a “definitive agreement” and plan of merger, with the aggregate value of the transaction worth $524 million, CSC reports.

CSC will acquire all of outstanding Mac-Gray common stock for $21.25 per share, payable in cash, representing a premium of 42% over the company’s closing stock price Oct. 14, CSC adds. The transaction’s aggregate value takes into account Mac-Gray’s outstanding stock options, restricted stock units and net debt as of June 30.

CSC is a provider of multi-family housing and commercial laundry solutions, as well as an industry leader in air vending services at convenience stores and gas stations, with more than 1 million machines in service. Mac-Gray, founded in 1927, provides laundry facilities management services to both multi-family and academic housing sectors. For the year ended Dec, 31, 2012, Mac-Gray had revenue of $322.1 million.

Mac-Gray’s board of directors unanimously approved the transaction.

“After a careful and thorough evaluation process, the Mac-Gray board has determined that the all-cash transaction with CSC maximizes value for our shareholders,” says Mac-Gray Chairman Thomas E. Bullock. “The board strongly believes that this transaction achieves that result, providing a significant premium for our shareholders.”

“We are excited to bring these two companies together to create a world-class operation,” says Bob Doyle, CEO of CSC. “Both CSC and Mac-Gray are industry leaders in customer service and technology. Bringing our teams together to share each other’s best practices will elevate both companies and enhance our customers’ experience. On behalf of CSC and our controlling shareholder, Pamplona Capital Management, we look forward to welcoming the Mac-Gray employees to our team.”

Completion of the acquisition is subject to conditions, CSC reports, including the adoption of the acquisition agreement by Mac-Gray stockholders, regulatory approval, and other customary closing conditions. The deal is expected to be completed in the first half of 2014.

Following completion of the transaction, Mac-Gray’s common stock will be delisted from the New York Stock Exchange and will no longer trade publicly, CSC adds.

BofA Merrill Lynch is acting as financial adviser to Mac-Gray, and Goodwin Procter LLP is serving as legal counsel. Morgan Stanley & Co. LLC, Deutsche Bank Securities Inc. and Evercore Group LLC are acting as financial advisers to CSC, and Kirkland & Ellis LLP is serving as legal counsel.


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