The Australian Business Growth Fund (ABGF) has invested $6 million in Queensland family business Consolidated Linen Service (CLS).
CLS will use the new capital to expand capacity and increase efficiency.
CLS services critical sectors such healthcare and aged care as well as tourist accommodation hospitality and mining. The business anticipates increasing demand from these sector as well as from significant events such as the 2032 Olympics.
Processing capacity limits the expansion of many local laundry operations but CLS has sought to overcome this by developing a network of strategically located facilities. The company is also introducing artificial intelligence (AI) and robotics for greater efficiency.
CLS was founded in 1990 by Neville Roberts a former dairy farmer and concrete pump operator. Recognising the opportunity to provide linen services to a Fraser Island resort, Roberts acquired a small laundry facility in Hervey Bay.
The linen hire business now has four main facilities, in Hervey Bay, the Whitsundays, Gladstone and Rockhampton, and a workforce of more than 300. The company can launder over 400 tonnes a week and makes more than 300 deliveries daily to around 700 customers.
CLS is now run by Neville Roberts’ sons Adam Roberts, managing director, and Tom Roberts, group general manager.
Adam Roberts said: “Our journey has been about more than just growing a business; it’s about making a difference in local communities by providing essential services that our customers can rely on as their businesses grow and expand.
“Whether it’s a luxury resort or rural hospital, we’ve built strong community relationships over the years, and our commitment to delivering an excellent service to local businesses has positioned us at the forefront of a competitive industry.”
Commercial linen services pick up used linen from customers, sort, wash, iron, fold and deliver back. In the case of CLS, pick-ups and deliveries are often across large distances.
The company sees improved efficiency as the key to growth and increased profitability and recognises technological innovation has a key role in this.
CLS is pioneering the integration of artificial intelligence and robotics which it is helping to develop in day-to-day operations.
“Innovations like automated sorting and chemical dosing systems enhance our efficiency, reduce environmental impact and extend equipment life,” Adam Roberts said.
Prior to approaching ABGF, CLS had sought funding from private equity firms and family offices.
Adam Roberts said private equity firms had considered the business too small to be of interest while family offices generally regarded it as too big.
“We chose ABGF because their growth capital will fast-track our expansion and boost our capacity and efficiency,” Adam Roberts said. “Importantly, ABGF respects our wish to maintain control.”
ABGF investment director Jack Lin said the fund believed in supporting small/medium size businesses that play an under-recognised yet outsized role in their communities.
“CLS’ combination of family business values, commercial acumen and scale represents a unique opportunity to enhance regional employment and service reliability in Queensland’s critical sectors,” he said.
ABGF, is a public-private partnership set up by the federal government and six leading trading banks with initial capital of $540 million. The fund was established to bridge the gap between late-stage venture capital and private equity investment, particularly for businesses that require patient capital. The fund only makes minority investments and seeks to enable founders to retain control while accessing growth funding.
The then Coalition federal government committed $100 million to the fund in late 2019 alongside $100 million commitments each from ANZ, CBA, NAB and Westpac banks and $20 million each from HSBC and Macquarie banks.
Image: Consolidated Linen Service group general manager Tom Roberts, founder Neville Roberts, and chief executive Adam Roberts.