Cintas To Buy G&K Services In $2.2 Bln Deal - Quick Facts

(RTTNews) - Corporate uniform supplier Cintas Corp. (CTAS) and G&K Services, Inc. (GK) said they have entered into a definitive agreement under which Cintas will acquire all outstanding shares of G&K Services for $97.50 per share in cash. The deal has a total enterprise value of about $2.2 billion, including acquired net debt.

The purchase price represents a nearly 19 percent premium to G&K Service's closing stock price on August 15, 2016. G&K Services, with annual revenue of about $1 billion, is a provider of branded uniform and facility services programs in the U.S. and Canada.

The combined company will provide products and caring service to over 1 million business customers. Cintas has had strong organic growth over many years, and the merger with G&K Services will provide access to additional processing capacity.

The boards of directors of both companies have approved the transaction, which is subject to approval by the holders of G&K Services common stock. The transaction is expected to close in the next four to six months.

Cintas expects the transaction to be accretive to its earnings per share in its second full year after closing. Additionally, the company anticipates realizing annual synergies in the range of $130 million to $140 million. Synergies are projected to be realized in their entirety in the fourth full year after closing.

Upon completion of the merger, G&K Services will be a wholly owned subsidiary of Cintas, and is expected to initially operate under its existing brand name.