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File photo of a sign in the office of the Ontario Teachers' Pension Plan.Matthew Sherwood/The Globe and Mail

Ontario Teachers' Pension Plan is exploring a sale or initial public offering of Alliance Laundry, a commercial laundry-equipment maker, people with knowledge of the matter said.

Canada's third-largest pension plan expects to seek about $250-million in a U.S. IPO, and values the business at about $2-billion, one of the people said, asking not to be identified discussing private information. Teachers is working with banks including Morgan Stanley and Bank of America Corp. on the IPO, the people said.

Deborah Allan, a spokeswoman for Teachers, declined to comment, as did representatives for Bank of America and Morgan Stanley.

Based in Ripon, Wis., Alliance Laundry says it's the world's largest designer and manufacturer of commercial laundry equipment with brands including Speed Queen and UniMac. Teachers bought the company from Bain Capital Partners in 2005 for $450-million.

Alliance expanded its reach across Europe, the Middle East, and Asia through the 2014 acquisition of Gullegem, Belgium-based Primus Laundry Equipment Group. Alliance reported revenue of $726-million in 2014, up 32 per cent from the previous year, company filings show. It had a profit of $29-million for the year.

Teachers also owns a 30-per-cent stake in coin-operated laundry machine provider CSC ServiceWorks Inc.

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