Exclusive-BDT & MSD Partners explores $5 billion sale of Alliance Laundry -sources

By Anirban Sen

(Reuters) -Merchant bank BDT & MSD Partners, the owner of Alliance Laundry Systems, is exploring a sale of the U.S. laundry equipment manufacturer that could value it at nearly $5 billion, including debt, according to people familiar with the matter.

The 116-year-old commercial laundry provider is working with investment bank Morgan Stanley to prepare for a sale process that will launch in the coming weeks, the sources said, requesting anonymity as the discussions are confidential.

BDT & MSD, which was created last year through the merger of an investment firm backed by computer maker Michael Dell (NYSE:) with investment banker Byron Trott’s merchant bank, is seeking a valuation for Alliance Laundry equivalent to more than 13 times the company’s 12-month earnings before interest, taxes, depreciation and amortization (EBITDA) of nearly $350 million, two of the sources said.

BDT & MSD, Alliance Laundry, and Morgan Stanley declined to comment.

Founded in 1908, Alliance Laundry manufactures large-capacity washers and dryers under five premium brands – Speed Queen, UniMac, Huebsch, Primus, and IPSO – and currently serves about 170 countries with more than 4,000 employees, according to its website. The company has grown its business through several tuck-in acquisitions over the years.

It supplies laundry systems to U.S. military facilities, laundromat chains, hotels, long-term healthcare facilities and clinics, restaurants, fire stations, residential apartments, and other businesses across sectors.

In 2015, Ontario Teachers’ Pension Plan sold its majority stake in Ripon, Wisconsin-based Alliance Laundry to BDT Capital Partners, prior to its merger with MSD Partners.

BDT & MSD is run by former Goldman Sachs alumni Trott and Gregg Lemkau. Over the past year, it has participated in several big deals, including buyout firm Silver Lake’s $12.5 billion buyout of software maker Qualtrics, and investments in athletic apparel maker Under Armour (NYSE:) and National Amusements, the family holding company of Shari Redstone.

BDT & MSD currently manages over $60 billion of assets across all its strategies, including private capital, private credit, and real estate. In December, the firm closed its Flagship Private Capital Fund 4 at $14 billion.