UniFirst Confirms Rejection of Unsolicited, Non-Binding and Highly Conditional Acquisition Proposal from Cintas Corporation

Rhea-AI Summary

UniFirst (NYSE: UNF) has confirmed its Board of Directors' unanimous rejection of an unsolicited acquisition proposal from Cintas received in November and December 2024. The proposal offered to acquire all outstanding common and Class B shares at $275.00 per share.

After careful review with independent advisors, the Board determined the proposal was not in the best interests of UniFirst, its shareholders, and stakeholders. The decision was based on the offer price, execution and business risks, feedback from major shareholders, and the company's future growth prospects. The Board and management team expressed confidence in their current strategy and commitment to creating shareholder value.

J.P. Morgan Securities and Paul Hastings LLP are serving as financial and legal advisors, respectively.

Positive

• Company maintains independence and control over its strategic direction
• Management's confidence in current growth strategy and value creation opportunities
• Support from major shareholders in rejecting the offer

Negative

• Rejection of $275.00 per share acquisition offer which could have provided immediate shareholder value

Insights

M&A Specialist

The rejection of Cintas 's <money>$275.00</money> per share acquisition offer represents a pivotal moment in the uniform services industry. Based on UniFirst's current market cap of <money>$3.18 billion</money>, this offer would value the company at approximately <money>$5.2 billion</money>, suggesting a significant premium of about <percent>63%</percent> over the current market value. The Board's unanimous rejection, supported by major shareholders, indicates strong conviction in UniFirst's standalone value proposition and growth trajectory.

The highly conditional nature of the proposal and potential regulatory hurdles in combining two major players in the uniform services sector likely factored into the decision. A merger would create significant market concentration, potentially triggering antitrust scrutiny. The Board's emphasis on execution risks suggests concerns about integration challenges and possible business disruption during a merger process.

Corporate Strategy Analyst

The Board's decision to maintain independence reflects a strategic calculation that organic growth and operational improvements can generate superior returns compared to the immediate premium offered. The engagement of J.P. Morgan as financial advisor suggests UniFirst may be positioning for alternative strategic options or preparing to demonstrate higher intrinsic value through operational enhancements.

The timing of this disclosure, following a private rejection in late 2024, indicates Cintas may be attempting to apply public pressure on UniFirst's board. This could potentially lead to a higher offer or trigger interest from other potential acquirers, effectively putting UniFirst "in play" in the M&A market. The involvement of Class B shareholders in the decision-making process adds complexity to any potential hostile takeover attempt, providing the company with additional strategic flexibility.

WILMINGTON, Mass., Jan. 07, 2025 (GLOBE NEWSWIRE) -- UniFirst Corporation (NYSE: UNF) (“UniFirst” or the “Company”) today confirmed that in November and December 2024, its Board of Directors received and unanimously rejected an unsolicited, non-binding and highly conditional proposal from Cintas Corporation to acquire all outstanding common and Class B shares of UniFirst for $275.00 per share.

Consistent with its fiduciary duties and in consultation with its independent advisors, 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. 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.

The UniFirst Board and management team remain confident in the strategy the Company is executing and the opportunities ahead to create significant shareholder value. The Board and management team are committed to creating value for all shareholders and will continue to take actions to achieve that objective.

J.P. Morgan Securities LLC is serving as UniFirst’s financial advisor and Paul Hastings LLP is serving as legal advisor.

About UniFirst Corporation

Headquartered in Wilmington, Mass., UniFirst Corporation (NYSE: UNF) is a North American leader in the supply and servicing of uniform and workwear programs, facility service products, as well as first aid and safety supplies and services. Together with its subsidiaries, the Company also manages specialized garment programs for the cleanroom and nuclear industries. In addition to partnering with leading brands, UniFirst manufactures its own branded workwear, protective clothing, and floorcare products at its five company-owned ISO-9001-certified manufacturing facilities. With more than 270 service locations, over 300,000 customer locations, and 16,000-plus employee Team Partners, the Company outfits more than 2 million workers every day. For more information, contact UniFirst at 888.296.2740 or visit UniFirst.com.

Forward-Looking Statements Disclosure

This press release contains forward-looking statements within the meaning of the federal securities laws that reflect the Company's current views with respect to future events. Such statements including, without limitation, statements regarding the Company’s strategies, opportunities, commitments and prospects. Forward-looking statements contained in this press release are subject to the safe harbor created by the Private Securities Litigation Reform Act of 1995 and may be identified by words such as “strategy,” “opportunities,” “create,” “continue,” “objective,” “achieve,” “future,” “growth,” “committed,” or the negative versions thereof, and similar expressions and by the context in which they are used. Such forward-looking statements are based on the Company’s current expectations and speak only as of the date made. Such statements are highly dependent upon a variety of risks, uncertainties and other important factors that could cause actual results to differ materially from those reflected in such forward-looking statements. Such factors include, but are not limited to, the Company’s ability to execute on its strategies, and the other factors described under Part I, Item 1A. “Risk Factors” and elsewhere in the Company’s Annual Report on Form 10-K for the year ended August 30, 2024. The Company undertakes no obligation to update any forward-looking statements to reflect events or circumstances arising after the date on which they are made.

Investor Relations Contact
Shane O’Connor, Executive Vice President & CFO
UniFirst Corporation
978-658-8888
shane_oconnor@UniFirst.com

Media Contact
Matthew Sherman / Aura Reinhard
Joele Frank, Wilkinson Brimmer Katcher
212-355-4449

FAQ

What was the per-share price offered by Cintas for UNF shares?

Cintas offered $275.00 per share for all outstanding common and Class B shares of UniFirst (UNF).

When did UniFirst (UNF) receive and reject the Cintas acquisition proposal?

UniFirst received the proposal in November and December 2024, with the Board of Directors unanimously rejecting it.

Why did UniFirst (UNF) reject Cintas 's acquisition proposal?

The Board rejected the proposal based on the offer price, execution and business risks, major shareholders' feedback, and the company's future growth and value creation opportunities.

Who are the advisors assisting UniFirst (UNF) in the Cintas acquisition proposal?

J.P. Morgan Securities is serving as financial advisor and Paul Hastings LLP as legal advisor to UniFirst.

What type of acquisition proposal did Cintas make for UNF?

Cintas made an unsolicited, non-binding, and highly conditional proposal to acquire UniFirst.