Aramark Holdings Prices IPO At $20/share, Said To Raise $725 Mln

(RTTNews) - Kitchen uniform company Aramark Holdings Corp. (ARMK) on Wednesday priced its initial public offering of 36.25 million shares of common stock at $20.00 per share, at the low-end of its estimated range. The offering is said to have raised proceeds of about $725 million. The company's stock is expected to begin trading on the New York Stock Exchange on Thursday under the ticker symbol "ARMK."

Aramark Holdings said it is offering 28.00 million shares of common stock and existing private-equity stockholders are offering 8.25 million shares of common stock. The company added that it will not receive any proceeds from the sale of the shares being sold by the selling stockholders.

Certain of the selling stockholders have also granted the underwriters a 30-day option to purchase up to an additional 5.44 million shares of common stock at the IPO price to cover over-allotments, if any.

The Philadelphia, Pennsylvania-based food-services company had earlier revealed in an amended Form S-1 filing with the U.S. Securities and Exchange Commission on December 2 that it will sell 36.25 million shares of common stock at an estimated price range between $20.00 and $23.00.

Aramark Holdings said intends to use the net proceeds from the offering to repay a portion of the outstanding term loans due July 26, 2016 and certain borrowings on the revolving credit facility under its senior secured credit facilities.

Following the completion of the offering, the company will have 229.84 million shares of common stock outstanding, immediately valuing the company at about $4.6 billion. The company said it intends to commence the payment of cash dividends on its common stock after closing the IPO.

The offering is expected to close on December 17, subject to customary closing conditions. Aramark Holdings publicly filed an initial registration statement on Form S-1 with the SEC for a $100 million IPO on September 9, 2013.

Aramark Holdings is a leader in professional services, providing award-winning food services, facilities management, and uniform and career apparel to health care institutions, universities and school districts, stadiums and arenas, and businesses around the world. It has more than 250,000 employees serving clients in 22 countries. In fiscal 2013, the company generated $13.9 billion of sales, up from $13.51 billion in 2012.

This is the third IPO for Aramark Holdings, which first went public in 1960 as a company focused on putting vending machines in factories. Later in 1984, its CEO Joseph Neubauer took the company private to avoid a hostile takeover.

Neubauer then again took the company private in January 2007, after a second IPO in 2001, by selling 85 percent of its shares to a consortium including Goldman Sachs Group, Inc. (GS), JPMorgan Chase & Co. (JPM), Thomas H. Lee Partners, and Warburg Pincus LLC as well as about 250 senior management personnel.

Goldman, Sachs & Co., J.P. Morgan Securities LLC, Credit Suisse Securities (USA) LLC, and Morgan Stanley & Co. LLC are acting as joint book-running managers for the offering.