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Downer EDI boss Peter Tompkins isn’t afraid to show non-core assets the door as part of his turnaround of the $3.1 billion construction contractor. And next in his line of sight is Linen Services Australia – née Spotless Laundries.

Street Talk can reveal the commercial laundry service business is being dressed up for a sale, 3½ years after Downer sold a 70 per cent stake to Sydney’s Adamantem Capital for $155 million. That deal, steered by VCA Partners, was almost felled by the arrival of the COVID-19 pandemic and came after repeated attempts to sell the business over the years.

This time around, Lazard Australia’s bankers have received the call-up to find a buyer for Linen Services Australia, which services more than 45,000 hospital beds. The business comprises eight laundries, five depots and four regional processors across Australia. All up, that’s about 80 million sheets a year.

The 97-year-old business booked $297.5 million revenue and $8.6 million net loss for the year ending July 2, 2023, according to accounts filed with the corporate regulator. For the record, it was last shopped with $265.3 million revenue and $59.1 million EBITDA forecast for the 2020 financial year.

For Downer, attempts to sell its 30 per cent share of Linen Services Australia come as Tompkins resumes the divestment of non-core assets, after first half earnings beat consensus profit forecasts.

Shares have climbed 25.5 per cent in the past 12 months, as the company convinces shareholders to look past accounting regularities and corruption allegations. Another investment, mining equipment maker Mineral Technologies, is being readied for a sale via Barrenjoey Capital Partners.

Read the full story tomorrow and more on the Street Talk page.

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