News January 09, 2025
UniFirst Rebuffs Cintas’ $5.3 Billion Acquisition Offer
Counselor Top 40 distributor Cintas wants to buy fellow uniform provider UniFirst, but the latter does not want to do a deal, saying being acquired is not in its best interest.
Key Takeaways
• The Offer: Cintas (asi/162167) aims to acquire UniFirst, offering a proposal that implies a total value of $5.3 billion in cash.
• No, Thanks: UniFirst has rejected the unsolicited offer.
• Pressure Tactics: Cintas has gone public with the offer and is openly urging UniFirst’s board to engage in negotiations for a mutually acceptable deal.
Counselor Top 40 distributor Cintas (asi/162167) is keen to execute the largest acquisition in the corporation’s history.
The acquisition target, UniFirst, is having none of it.
Publicly traded Cintas, a Mason, OH-headquartered corporation best known for its uniform rental and facility services that also operates in promo, shared this week that it offered to acquire all outstanding common and Class B shares of UniFirst for $275 each in cash.
The proposal, Cintas said, implies a total value of $5.3 billion for UniFirst, a Wilmington, MA-headquartered publicly traded corporation that manufactures, sells and rents uniforms and protective clothing. According to Cintas, the offer would provide UniFirst shareholders with a 46% premium on UniFirst’s 90-day average stock closing price as of Jan. 6.
“We firmly believe in the compelling strategic fit between our two companies, and our offer would deliver immediate and compelling value to UniFirst shareholders,” said Cintas CEO Todd Schneider. “The combination would also amplify the benefits of Cintas and UniFirst’s ongoing technology investments to drive growth and benefit our collective customers and employee-partners.”
The UniFirst Board of Directors is not down with the deal, calling the offer “unsolicited, non-binding and highly conditional.”
“The board conducted a careful review of the unsolicited proposal and determined that it is not in the best interests of UniFirst, its shareholders and other stakeholders,” the directors said in a statement. “In making its determination, the board considered the offer price, execution and business risks, feedback from some of the company’s largest shareholders by voting power, and the company’s future growth and value creation opportunities.”
In essence, Cintas went public with its offer to put pressure on UniFirst.
“Our decision to publicize our proposal reflects our conviction in the merits of the combination [of the businesses], the value we place on UniFirst and its team, and the belief that UniFirst shareholders should know the value they stand to realize,” Schneider said. “We call on the UniFirst Board, its controlling shareholders and management team to immediately engage with us to reach a mutually acceptable definitive agreement.”
Based on estimated North American promotional product revenue of $218.6 million, Cintas ranked 13th on Counselor’s most recent list of the largest distributors in the industry.
Cintas has consistently been generating gains in sales and earnings. The firm increased total company sales 8.9% on an annual basis to $9.6 billion during its 2024 fiscal year, which ended May 31. Sales and earnings were also up in Q1 and Q2 of the firm’s 2025 fiscal year.
In its most recent fiscal year, which ended with August, UniFirst generated revenue of $2.427 billion, a year-over-year increase of 8.7%.