Cintas has officially announced its strategic intention to acquire UniFirst, a smaller uniform rental company, in a compelling all-cash deal valued at approximately $5.3 billion. The proposed acquisition price stands at $275 per share, representing a notable 46% premium based on UniFirst's 90-day average price prior to the announcement.
This premium is indicative of Cintas' confidence in the potential benefits of the merger for both companies' shareholders. In midday trading following the announcement, shares of UniFirst surged by 17%, while Cintas' stock rose by 2.5%. Cintas' CEO, Todd Schneider, remarked on the synergistic opportunities that the merger could create, stating, "We firmly believe in the compelling strategic fit between our two companies, and our offer would deliver immediate and compelling value to UniFirst shareholders." He further elaborated that the merger would enhance the execution of ongoing technology investments vital for future growth. This isn't the first time Cintas has attempted to engage with UniFirst; the company initially made an offer of $255 per share back in February 2022.
After a period of negotiations and a revised proposal in November 2024, which UniFirst ultimately rebuffed, Cintas expressed its readiness to improve the offer on two occasions in December when discussions stalled. Schneider has made a public appeal to UniFirst’s board and management, urging them to engage in a dialogue to reach a favorable and definitive agreement that benefits all stakeholders involved. Cintas is optimistic that the acquisition will prove advantageous for its shareholders, with expectations of generating significant operating cost synergies from the union of both companies.
The confidence in overcoming regulatory hurdles further bolsters Cintas' position as they pursue this strategic move. In a counter-statement, UniFirst clarified its rationale for rejecting Cintas' offer, labeling it as “highly conditional” and asserting that it did not align with the company's best interests.
The board of UniFirst remains steadfast in the current strategic direction the company is taking and is focused on maximizing shareholder value through various opportunities ahead. Overall, the landscape of uniform rental services may be poised for a significant shift depending on the outcomes of these negotiations as both companies continue to navigate their futures in this competitive sector..