Aramark announced that it entered into definitive agreements to acquire Ameripride, a uniform, linen rental and supply company; and Avendra, a hospitality procurement services company.
“Today is an historic day at Aramark as we announce we will join forces with two leading companies that will significantly improve how we service our customers, while expanding our capabilities and scope in critical areas of our business,” says Eric J. Foss, Aramark’s chairman, president and CEO.
Aramark will acquire AmeriPride for a purchase price of $1.0 billion, or a net purchase price of $850 million after adjusting for the value of the anticipated tax benefits. AmeriPride operating in the U.S. and Canada, has an annual revenue of approximately $600 million.
“AmeriPride is a highly-respected company with a tremendous legacy that will extend and complement Aramark’s uniforms business,” Foss says. “This merger will enable us to enhance our customer service experience, unlock improved efficiencies, develop new career opportunities for employees and deliver value for our shareholders. Our companies share a commitment to world-class service, and I look forward to welcoming AmeriPride to the Aramark family.”
The combination of these two uniform services companies will create a leading uniform services provider with enhanced scale and capabilities, serving nearly 500,000 customers. The transaction will bolster Aramark’s competitive position in the U.S., and immediately establish a strong position in Canada.
Additionally, Aramark anticipates annual cost synergies of approximately $70 million, which it expects will be fully realized by the fourth fiscal year after closing.
Aramark will also acquire Avendra for a purchase price of $1.35 billion, or a net purchase price of $1.05 billion after adjusting for the value of the anticipated tax benefits.
Avendra is a hospitality procurement services provider in North America, managing nearly $5 billion in annual purchasing spend for over 650 companies at more than 8,500 locations, including over half of the Top 30 hotel chains. Avendra was founded in 2001 by five hospitality leaders: Marriott, Hyatt, Fairmont Hotels, ClubCorp and IHG.
“Combining Avendra’s powerful procurement capability with Aramark’s leading supply chain management expertise will bring increased buying scale and improved service levels to both Avendra’s and Aramark’s customers, while strengthening our industry reach and competitive positioning,” says Foss. “I am excited about the proven talents and deep experience the Avendra team brings to our company and look forward to welcoming them to the Aramark family.”
The transactions are expected to close by the end of calendar year 2017, subject to customary closing conditions and regulatory approvals.
