Cintas to Acquire G&K Services
Cintas Corp., Mason, OH, and G&K Services Inc., Minnetonka, MN, recently announced that they have entered into an agreement under which Cintas will acquire all outstanding shares of G&K Services for $97.50 per share in cash, for a total value of approximately $2.2 billion, including acquired net debt. The purchase price represents a premium of roughly 19% to the closing price per share of G&K Services’ common stock on Aug. 15, according to a news release.
The transaction is expected to close in the next four to six months. Upon completion of the merger, G&K Services will be a wholly owned subsidiary of Cintas, and is expected to initially operate under its existing brand name. Working together, decisions will be made over time regarding the integration of the two companies, the release said.
“Cintas’ management team and board of directors have a deep level of respect for G&K Services, its long and impressive heritage, and its employees,” said Scott D. Farmer, Cintas’ CEO. “Our companies share a dedication to customers, employee-partners and shareholders, which will build a great foundation for a successful combination.”
G&K Services, with annual revenue of approximately $1 billion, provides uniform and facility services programs in the United States and Canada. The combined company will provide products and service to more than 1 million business customers. Cintas has had strong organic growth over many years, and the merger with G&K Services will provide access to additional processing capacity. Route density also will increase as a result of the merger. This will improve customer service and result in significant cost savings.
The boards of directors of both companies have approved the transaction, which is subject to approval by the holders of G&K Services common stock, the expiration or termination of applicable waiting periods under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, and other customary closing conditions. The transaction is expected to be accretive to Cintas’ earnings per share in its second full year after closing. Additionally, Cintas anticipates realizing annual synergies in the range of $130 million to $140 million. Synergies are projected to be realized in their entirety in the fourth full year after closing.
To read the full Cintas’ release, click here. For more information on this merger, visit the following links: