Acquiring Avendra to Enhance Purchasing Capability and Extend
Acquiring AmeriPride Services to Expand Scope and Geography of
PHILADELPHIA--(BUSINESS WIRE)--Oct. 16, 2017--
Aramark (NYSE:ARMK) announced today that it entered into definitive
agreements to acquire two companies that will deliver growth and
strengthen the company’s competitive position across its portfolio of
Food, Facilities and Uniforms businesses.
“Today is an historic day at Aramark as we announce we will join forces
with two leading companies that will significantly improve how we
service our customers, while expanding our capabilities and scope in
critical areas of our business,” said Eric J. Foss, Aramark’s Chairman,
President and CEO. “We have been executing successfully against our
clear and focused strategy and have substantially elevated our operating
performance and financial flexibility. These strategic and financially
compelling transactions represent the next step in our commitment to
drive sustainable shareholder value.”
Avendra: The Leading Hospitality Procurement Services Company
Aramark and Avendra, LLC have entered into a definitive agreement under
which Aramark will acquire Avendra for a purchase price of $1.35
billion, or a net purchase price of $1.05 billion after adjusting for
the value of the anticipated tax benefits. Avendra is the leading
hospitality procurement services provider in North America, managing
nearly $5 billion in annual purchasing spend for over 650 companies at
more than 8,500 locations, including over half of the Top 30 hotel
chains. Avendra was founded in 2001 by five hospitality leaders:
Marriott, Hyatt, Fairmont Hotels, ClubCorp and IHG.
“Combining Avendra’s powerful procurement capability with Aramark’s
leading supply chain management expertise will bring increased buying
scale and improved service levels to both Avendra’s and Aramark’s
customers, while strengthening our industry reach and competitive
positioning,” said Foss. “I am excited about the proven talents and deep
experience the Avendra team brings to our company and look forward to
welcoming them to the Aramark family.”
The merger also creates opportunities for Aramark and Avendra to grow
their customer base outside of their traditional industries.
Additionally, Aramark anticipates annual procurement cost synergies of
approximately $40 million, which it expects will be fully realized by
the third fiscal year after closing.
AmeriPride: A Leading Uniform and Linen Rental and
Aramark and AmeriPride Services Inc. also announced today that they have
entered into a definitive agreement under which Aramark will acquire
AmeriPride for a purchase price of $1.0 billion, or a net purchase price
of $850 million after adjusting for the value of the anticipated tax
benefits. AmeriPride is a leading uniform and linen rental and supply
company in the U.S. and Canada, with annual revenue of approximately
“AmeriPride is a highly-respected company with a tremendous legacy that
will extend and complement Aramark’s uniforms business,” Foss continued.
“This merger will enable us to enhance our customer service experience,
unlock improved efficiencies, develop new career opportunities for
employees and deliver value for our shareholders. Our companies share a
commitment to world-class service, and I look forward to welcoming
AmeriPride to the Aramark family.”
The combination of these two uniform services companies will create a
leading uniform services provider with enhanced scale and capabilities,
serving nearly 500,000 customers. The transaction will bolster Aramark's
competitive position in the U.S., and immediately establish a strong
position in Canada.
Additionally, Aramark anticipates annual cost synergies of approximately
$70 million, which it expects will be fully realized by the fourth
fiscal year after closing.
The Board of Directors of Aramark has unanimously approved both
transactions, which were also unanimously approved by the Board of
Managers of Avendra and Board of Directors of AmeriPride, respectively.
The transactions are expected to close by the end of calendar year 2017,
subject to customary closing conditions and regulatory approvals.
Aramark will finance the transactions through the issuance of new debt,
and has received fully committed financing.
For the Avendra transaction, J.P. Morgan acted as lead financial adviser
to Aramark, while Simpson Thacher & Bartlett LLP acted as legal counsel.
For the AmeriPride transaction, Goldman Sachs & Co. LLC and Morgan
Stanley & Co. LLC acted as lead financial advisers and Morgan, Lewis &
Bockius LLP acted as legal counsel. Credit Suisse acted as the financial
adviser to AmeriPride, while Dorsey & Whitney LLP acted as legal
counsel. Goldman Sachs & Co. LLC acted as financial adviser and Latham &
Watkins LLP provided legal counsel to Avendra, LLC.
Aramark will hold a conference call today, October 16, 2017 at 8:30 a.m.
E.T. to discuss these acquisition announcements. Please dial in prior to
the start of the call:
Related materials and a replay of the call will be available on the
Company's website, www.aramark.com
on the investor relations page.
Aramark (NYSE: ARMK) proudly serves Fortune 500 companies, world
champion sports teams, state-of-the-art healthcare providers, the
world's leading educational institutions, iconic destinations and
cultural attractions, and numerous municipalities in 19 countries around
the world. Our 270,000 team members deliver experiences that enrich and
nourish millions of lives every day through innovative services in food,
facilities management and uniforms. We operate our business with social
responsibility, focusing on initiatives that support our diverse
workforce, advance consumer health and wellness, protect our
environment, and strengthen our communities. Aramark is recognized as
one of the World's Most Admired Companies by FORTUNE as well as an
employer of choice by the Human Rights Campaign and DiversityInc. Learn
more at www.aramark.com
or connect with us on Facebook and Twitter.
Headquartered in Rockville, MD, Avendra is North America’s leading
hospitality procurement services provider and combines years of
hospitality expertise, purchasing power, services and software to help
more than 8,000 customers impact the bottom line, improve operational
performance, and better serve guests. Additional company information can
be found at www.avendra.com
Headquartered in Minnetonka, Minn., AmeriPride Services is recognized as
one of the largest textile rental and supply companies in North America.
Operating more than 115 production facilities and service centers
throughout the United States and Canada, the company provides linen and
towels, uniforms, floor mats, restroom and cleaning products to nearly
150,000 customers through rental and purchase programs. As a true
business partner, AmeriPride helps customers improve their image while
keeping facilities clean and employees safe. Innovation, personalized
service and a dedication to company values has sustained the private,
family-owned company for more than 125 years. AmeriPride’s demonstrated
commitment to customers, the community, employees and the environment
has made them the People You Can Count On. Additional company
information can be found at www.ameripride.com.
Cautionary Statements Regarding Forward-Looking Statements
This press release includes "forward-looking statements" within the
meaning of the Private Securities Litigation Reform Act of 1995 that
reflect our current views as to future events and financial performance
including with respect to, without limitation, the benefits, costs and
timing of and ability to consummate the transactions with each of
Avendra and AmeriPride and related financings, as well as statements
regarding the companies’ services and products. These statements can be
identified by the fact that they do not relate strictly to historical or
current facts. They relate to the topics set forth above or use words
such as "outlook," "aim," "anticipate," "are confident," "have
confidence," "estimate," "expect," "will be," "will continue," "will
likely result," "project," "intend," "plan," "believe," "see," "look to"
and other words and terms of similar meaning or the negative versions of
Forward-looking statements speak only as of the date made. These
forward-looking statements are subject to risks and uncertainties that
may change at any time, and, therefore, our actual results may differ
materially from those that we expected. Such risks and uncertainties
include, among others, the outcome and timing of regulatory reviews of
both transactions, the ability of the companies to complete the
transactions in the time expected or at all, our ability to successfully
integrate the businesses of Avendra and AmeriPride and costs and timing
related thereto, the risk of unanticipated restructuring costs or
assumption of undisclosed liabilities, the risk that we are unable to
achieve the anticipated benefits (including tax benefits) and synergies
of the transactions including whether the proposed transactions will be
accretive and within the expected timeframes, our ability to complete
the anticipated financing of the transactions on our expected terms, the
availability of sufficient cash to repay certain indebtedness and our
decision to utilize the cash for that purpose, the disruption of the
transactions to each of Avendra and AmeriPride and their respective
managements; the effect of announcement of the transactions on each of
Avendra’s and AmeriPride’s ability to retain and hire key personnel and
maintain relationships with customers, suppliers and other third
parties, our ability to attract new or maintain existing customer and
supplier relationships at reasonable cost, our ability to retain key
personnel and the other factors set forth in the "Risk Factors," -"
Legal Proceedings" and "Management Discussion and Analysis of Financial
Condition and Results of Operations" sections and other sections of our
Annual Report on Form 10-K filed with the Securities and Exchange
Commission on November 23, 2016 as such factors may be updated from time
to time in our other periodic filings with the SEC, which are accessible
on the SEC's website at www.sec.gov
and which may be obtained by contacting Aramark's investor relations
department via its website www.aramark.com.
Accordingly, there are or will be important factors that could cause
actual outcomes or results to differ materially from those indicated in
these statements. These factors should not be construed as exhaustive
and should be read in conjunction with the other cautionary statements
that are included in this release and in our filings with the SEC. As a
result of these risks and uncertainties, readers are cautioned not to
place undue reliance on any forward-looking statements included herein
or that may be made elsewhere from time to time by, or on behalf of, us.
We undertake no obligation to publicly update or review any
forward-looking statement, whether as a result of new information,
future developments, changes in our expectations, or otherwise, except
as required by law.
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Karen Cutler, (215) 238-4063
Kate Pearlman, (215) 409-7287