By Lauren Thomas

Cintas, a maker of workplace products, said it made a $5.1 billion offer for smaller uniform supplier UniFirst that has been rebuffed multiple times.

The details

The company went public with its offer Tuesday morning after it said UniFirst's board refused multiple times to engage further on any deal talks. The Wall Street Journal earlier reported on the proposal.

Cintas proposed acquiring all of UniFirst's outstanding common and Class B shares for $275 apiece, in cash, according to the letters delivered to UniFirst's board in recent weeks. That would peg UniFirst with an equity value of about $5.1 billion. (The total deal value is roughly $5.3 billion, the letters delivered to UniFirst's board say.)

The offer price is a more than 60% premium to where UniFirst shares ended trading Monday. The stock closed at $169.33, giving the company a market value of roughly $3.1 billion.

Cintas has a market value of over $74 billion.

The context

UniFirst, based in Wilmington, Mass., provides uniforms and protective clothing to businesses across industries, according to its website.

Cincinnati-based Cintas makes products including uniforms, mops, restroom supplies, first-aid items and other safety products, its website says.

This isn't the first time Cintas has made a go at UniFirst. In February 2022, it indicated its interest in a deal and offered $255 a share at the time, a 43% premium to where the stock had been trading, the letters published Tuesday say. (UniFirst shares are down about 5% since February 2022.)

Cintas's latest proposal was initially delivered to UniFirst's board in a November letter. The company has since made multiple attempts to engage with UniFirst, including by stating its willingness to consider increasing its offer price, a subsequent letter says.

UniFirst has told Cintas that its board unanimously concluded that a deal wasn't in the best interest of the company and its stakeholders, according to correspondence in December and November.

In October, UniFirst had said in a press release that it was excited about the investments it was making and believed its business had "significant long-term potential."

The rationale

For Cintas, a deal would allow the combined companies to serve more customers and make greater use of its recent investments in technology and infrastructure.

Cintas also thinks investors would like the deal: 79% of UniFirst common shares are held by investors who also own Cintas's stock, according to a Cintas analysis included in the letters delivered to UniFirst's board.

A deal for UniFirst, should it happen, would be Cintas's biggest transaction ever.

Cintas is led by its Chief Executive Officer Todd Schneider, who has held that role since June 2021.

Write to Lauren Thomas at lauren.thomas@wsj.com

(END) Dow Jones Newswires

January 07, 2025 09:09 ET (14:09 GMT)

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