05/29/2013 04:41 EDT | Updated 07/29/2013 05:12 EDT

K-Bro Linen in talks with Health Shares Services Saskatchewan for contract

EDMONTON - K-Bro Linen Inc. (TSX:KBL) said Wednesday that it been chosen as a "preferred provider" and will start talks with Health Shared Services Saskatchewan regarding a long-term contract for laundry and linen services for the health-care system in that province.

K-Bro said it will build a processing facility in Saskatchewan if it is able to successfully sign an agreement with the provincial organization.

Health Shared Services Saskatchewan, or 3sHealth, was created in 2012 to help provide efficient, province-wide common services to the province's health sector.

"We are very pleased to be selected as the preferred provider to negotiate a long-term contract with 3sHealth," K-Bro president and chief executive Linda McCurdy said in a statement.

"It is very satisfying to be successful in a competitive process and have the opportunity to develop our relationship with 3sHealth."

K-Bro provides laundry and linen services across Canada with eight processing facilities under several banners, including K-Bro Linen Systems Inc., Buanderie HMR and Les Buanderies Dextraze.

Shares in the company, which announced the contract talks after the close of markets, were up 22 cents at $33.67 on the Toronto Stock Exchange on Wednesday.