Winning Big With M2M – Pamplona Capital Management Increases its Stake

by Daniel Mandell | 10/16/2013

Yesterday, Mac-Grey was acquired by CSC ServiceWorks for a 41% premium over Monday’s share price. This is interesting to us because of the M2M element. The newly combined entity represents a perfect example of what can happen when things coin-operated or otherwise are connected to the cloud.

 Mac-Grey provides M2M enabled commercial laundry products and services. For example, if you owned an apartment building and wished to provide an on-premises laundry room, you might contract with Mac-Grey to provide that service. Mac-Grey would install and manage the washers and dryers and you, as the building owner, could collect a revenue stream without the hassle of owning and maintaining the machines yourself.

The M2M element comes in because Mac-Grey was extremely successful in embedding M2M connectivity into the laundry machines it owns, sells and/or supports. Because of M2M, users can see if machines are available at their facility and receive alerts via a mobile app when their laundry is done. Multiple payment options are now more practical and the business owner and users have the appropriate visibility on machine usage patterns. Service is automatically summoned at the first sign of trouble and Mac-Grey can efficiently assign its staff as needed.

Pamplona Capital is quietly building an M2M-enabled portfolio of companies. CSC ServiceWorks was formed in May, 2013 through the acquisition of CoinMach which was also providing laundry services and Air-Serv, which provides the tire-inflation and vacuum kiosks that you often see at convenience stores and gas stations. In June, the portfolio was increased by the acquisition of Sparkle, a Canadian laundry services firm. Now the portfolio, held by the Pamplona Capital Management, includes Mac-Grey. One would think that leveraging the Mac-Grey M2M expertise along with elements from all the other entities should create an even stronger M2M-enabled set of products and a streamlined service organization to support them.

I imagine that Pamplona's name has something to do with the running of bulls which would be a good thing in financial markets but dangerous otherwise. In this case, running with M2M is a pretty safe bet.