Clarus Linen Systems
Centerstone Linen Services, LLC d/b/a Clarus Linen Systems (“Clarus” or the “Company”), is a leading provider of high-quality linen rental and commercial laundry services to the healthcare industry, primarily supplying scrubs, sheets, towels, blankets, patient apparel and other linen products to hospitals and healthcare clinics. The Company is a corporate parent of four subsidiary corporations: Atlas, Alliance, Atlanta and Winchester. Together with its subsidiaries, Clarus operated five production facilities in the states of New York, Georgia and South Carolina that provided daily pick-ups and deliveries to their customers.
As a result of management turnover and related revenue declines and operational challenges, Clarus implemented various strategic initiatives in 2017 and 2018, including contract rationalization and the closure of two plants. However, as a result of these past issues and a leveraged balance sheet, Clarus experienced significantly constrained liquidity. The Company’s cash constraints negatively impacted Clarus’s ability to consistently purchase adequate linen, leading to plant inefficiencies and fulfillment issues. Ultimately, the Company filed for protection under Chapter 11 of the United States Bankruptcy Code in the Northern District of New York and retained SSG.
SSG conducted a comprehensive marketing process which resulted in a wide range of interest, primarily from strategic parties that focused on the individual production facilities. The process resulted in multiple offers for the operations and assets. SSG’s deep industry expertise and experience running a thorough sale process created a competitive auction environment. Ultimately, offers from three separate buyers were selected as winning bids to maximize value for stakeholders. Crown purchased the Spartanburg, South Carolina and Albany, Georgia operations, CleanCare acquired the Buffalo, New York, operation and PureStar purchased assets in Atlanta, Georgia.