Aramark announces major acquisitions worth $2 billion-plus

By Harold Brubaker, Philly.com on Oct 19, 2017

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Aramark's uniform-rental and linen-supply business in the United States and Canada.

The net cost of the two privately held companies, after anticipated tax benefits, is expected to be $1.9 billion. Philadelphia-based Aramark said it will issue debt to pay for the acquisitions, which are expected to be completed by the end of this year.

One company, Rockville, Md.-based Avendra employs 300 and has $140 million in annual revenue.

The second deal, for Minnetonka, Minn.-based Aramark's uniform business. That unit had $1.56 billion in revenue in the year that ended on Sept. 30., 2016. AmeriPride employs 6,000.

"Either one of these deals alone would have been the largest in the company's 80-year history," Eric J. Foss, Aramark's chairman and chief executive, told analysts on a conference call.

Previously, Aramark's largest acquisition was the 2001 purchase of ServiceMaster's facilities-management arm for $800 million.

Foss' key focus during Aramark's scale and generate cost-savings synergies totaling $110 million annually four years after closing.

Aramark buys and increasing its leverage to negotiate lower prices.

The combination of AmeriPride with Aramark's uniform business is expected to result in drivers having more customers on their routes and other benefits that will reduce costs, Foss said.

Moody's senior credit officer Edmond DeForest said.

Shares in Aramark, which employs 1,200 at its corporate headquarters in Center City and 6,500 in this region, gained 20 cents, or less than 1 percent, to close at $42.53 on the New York Stock Exchange.

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