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U.S. Bankruptcy Court Approves Coyne Sale to Cintas, Others

November 05, 2015, 07:24 AM
Filed Under: Bankruptcy

Coyne International Enterprises Corp., a leading U.S. commercial laundry service company, will sell its business operations to three industrial laundry companies for a total of $43.45 million as part of its Chapter 11 proceedings. The transactions were approved on October 29 by Judge Margaret Cangilos-Ruiz of the U.S. Bankruptcy Court for the Northern District of New York in Syracuse.

The three buyers are Cintas Corporation, Prudential Overall Supply Company and Clean Uniforms and More!

"Since filing for Chapter 11, we have focused our efforts on concluding this process in an efficient and organized manner, and ensuring a seamless transition of our customers and routes," said Mark Samson, Coyne’s CEO. “We believe all three buyers — Cintas, Prudential Overall Supply and Clean Uniforms — are each a good fit for providing the high-quality service that customers have come to expect from Coyne."

Specifics about the sales that Coyne expects to complete by November 30, 2015, include:

Cintas will purchase Coyne's customers and inventory in Bristol, Tennessee; Buffalo, New York; Cleveland, Ohio; London, Kentucky; Syracuse, New York; and York, Pennsylvania, for $28.25 million. Current Coyne employees may apply for any of Cintas’ open positions.

Prudential Overall Supply Company will purchase Coyne's operations in Richmond, Virginia, and Greenville, South Carolina, for $10.2 million. The company will accept job applications from current Coyne employees.

Clean Uniforms and More! will purchase Coyne's customers and inventory in New Bedford, Massachusetts, for $4 million and will accept applications from Coyne employees for new positions.

In its Chapter 11 filing on July 31, 2015, and under rules approved by the Bankruptcy Court, Coyne’s existing senior management team had a preliminary agreement to purchase the company’s operations and continue running the business unless the auction resulted in higher bids. Coyne will provide severance to all employees whom it does not retain.

“We are disappointed that the existing Coyne team was outbid. We want to thank our hard-working employees for their dedication, our customers for their loyalty and the employee union leaders who ratified agreements with us prior to the auction,” Samson said. “We are pleased to have obtained a higher value for the company during the auction and are using that additional money to increase severance at the locations we lost."

During the year prior to its Chapter 11 filing, Coyne marketed its assets to prospective industry and financial buyers unsuccessfully. Except for Coyne's location in Richmond, Virginia, the company's physical facilities are not included in these three sales and will shut down.

Herrick, Feinstein LLP is representing Coyne as lead bankruptcy counsel. Coyne’s financial advisor is CohnReznick LLP, and its investment banker is SSG Capital Advisors, LLC.

Keating Muething & Klekamp PLL is representing Cintas. Norton Rose Fulbright is representing Prudential Overall Supply Company. Plourde, Bogue, Moylan & Marino, LLP is representing Clean Uniforms and More!

Headquartered in Syracuse, Coyne was founded in 1929 by J. Stanley Coyne and grew into one of the largest privately owned industrial laundry companies in the United States. Coyne currently operates nine plants and 15 service centers in 23 states. Coyne provides comprehensive uniform sales/rental and laundry services to more than 10,000 customers in a wide variety of industries. Products offered by Coyne include workplace uniforms, career apparel, protective garments, shop towels, floor mats, treated dust mops and wet mops. Coyne also provides linens, mats, towels and restroom hygiene products.

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