\nCintas Corporation (Nasdaq: CTAS) today announced that it submitted a proposal to the Board of Directors of UniFirst Corporation (NYSE: UNF) to acquire all outstanding common and class B shares of UniFirst for $275.00 per share (the \u201cProposal\u201d) in cash. The Proposal implies a total value for UniFirst of approximately $5.3 billion and offers UniFirst shareholders a 46% premium to UniFirst\u2019s ninety-day average closing price as of January 6, 2025.<\/p>\n
\nThe Proposal was initially delivered to the UniFirst Board on November 8, 2024. Despite Cintas\u2019 multiple attempts to engage in a collaborative discussion, including a willingness to identify potential sources of additional value that would enable Cintas to increase its offer price and the Company\u2019s openness to exploring alternative forms of consideration for the benefit of UniFirst shareholders, UniFirst\u2019s Board has refused to meet.<\/p>\n
\nTodd Schneider, President and Chief Executive Officer of Cintas, said, \u201cWe firmly believe in the compelling strategic fit between our two companies, and our offer would deliver immediate and compelling value to UniFirst shareholders. The combination would also amplify the benefits of Cintas and UniFirst\u2019s ongoing technology investments to drive growth and benefit our collective customers and employee-partners.\u201d<\/p>\n
\n\u201cWhile we would have preferred to have discussions with UniFirst in private, this is the second time in nearly three years that UniFirst has refused our constructive attempts to engage on an extremely compelling offer. Our decision to publicize our Proposal reflects our conviction in the merits of the combination, the value we place on UniFirst and its team and belief that UniFirst shareholders should know the value they stand to realize. We call on the UniFirst Board, its controlling shareholders and management team to immediately engage with us to reach a mutually acceptable definitive agreement that delivers the full value of this combination for shareholders and other stakeholders.\u201d<\/p>\n
\nThe combined company would provide innovative products and outstanding service to well over 1 million business customers across the US and Canada. Cintas has an exceptional track record of organic growth, and the combination with UniFirst would provide additional processing capacity and greater route density which would further enhance customer service.<\/p>\n
- \n
- Compelling Strategic and Industrial Logic Delivers Benefits for Combined Company\u2019s Customers and Employee-Partners<\/b>: Cintas and UniFirst are a compelling strategic fit with shared priorities to enhance service for customers. A combination would accelerate the benefits of the companies\u2019 investments in technology and create opportunities to leverage the combined infrastructure and route networks. Together, Cintas and UniFirst would also be better able to meet the challenges posed by continued and increasing competition from much larger and better-capitalized companies focused on increasing their garment and facility solutions and investing in last mile fleets.\n<\/li>\n<\/ul>\n
- \n
- Opportunity for UniFirst Team: <\/b>Like UniFirst, Cintas has a nearly century-long heritage and deep family roots, and Cintas greatly respects the Croatti family and UniFirst team and the way they serve their customers. An enduring value at Cintas is the importance of its employees, whom it calls \u201cpartners,\u201d sharing collectively in the Company\u2019s success. Cintas would welcome UniFirst employees and ensure opportunities to develop and prosper within Cintas.\n<\/li>\n<\/ul>\n
- \n
- Delivering Compelling, Immediate and Certain Value for UniFirst and Cintas Shareholders<\/b>:Under the terms of the Proposal, UniFirst shareholders would receive an immediate and compelling 46% premium for their UniFirst shares in cash. The proposed acquisition is expected to be accretive to Cintas shareholders and would unlock attractive operating cost synergies for the combined company. 79% of UniFirst common shares are held by investors that also own Cintas stock.\n<\/li>\n<\/ul>\n
- \n
- Clear Path to Completion:<\/b> Cintas has conducted significant work on the regulatory front, including with leading regulatory counsel and other advisors, and is confident in the path through regulatory review and closing.\n<\/li>\n<\/ul>\n
Customary Approvals and No Financing Contingency<\/span><\/b><\/p>\n
\nCompletion of the contemplated transaction is contingent upon reaching a definitive agreement and would be subject to the satisfaction of customary closing conditions, including receipt of UniFirst shareholder and required regulatory approvals. The proposed transaction would not be subject to any financing contingencies or approval by Cintas\u2019 shareholders. The cash consideration would be financed from Cintas cash on hand, committed lines of credit and\/or other available sources of financing.<\/p>\n
Engagement History<\/span><\/b><\/p>\n
\nCintas initially approached UniFirst and delivered an indication of interest to acquire UniFirst for $255 per share (the \u201cPrior Proposal\u201d) on February 7, 2022, an offer that represented a 43% premium to UniFirst\u2019s closing price on that date. UniFirst summarily rejected that offer in February 2022 without any substantive engagement with Cintas. Since that time, UniFirst shares have declined 5% — during the same period, the S&P 500 has appreciated 33% and Cintas stock has appreciated 95%.<\/p>\n
\nOn November 8, 2024, Cintas delivered its Proposal to acquire UniFirst for $275 per share. After Cintas reiterated the Proposal and expressed a desire to meet in person to reach a collaborative agreement on November 25, 2024, UniFirst rejected the Proposal on November 27, 2024, without any further engagement.<\/p>\n
\nOn December 3, 2024, Cintas reiterated its Proposal to UniFirst and requested an in person meeting to discuss the Proposal, as well as potential sources of additional value that would allow Cintas to increase its offer. UniFirst again rejected the Proposal on December 9, 2024, and refused any further engagement.<\/p>\n
\nOn December 20, 2024, Cintas reiterated the Proposal and its willingness to meet with UniFirst and expressed a commitment to address UniFirst\u2019s comments outlined in UniFirst\u2019s rejection, including that Cintas may be willing to increase its Proposal of $275 per share should UniFirst\u2019s value creation plan justify such an increase. Cintas also indicated a willingness to discuss ways to preserve the UniFirst legacy post a transaction. UniFirst again refused to engage despite our best efforts to arrange collaborative discussions.<\/p>\n
\nThe current Proposal of $275 per share in cash represents a:<\/p>\n
- \n
- \n46% premium to UniFirst’s ninety-day average closing price as of January 6, 2025;<\/p>\n<\/li>\n
- \n54% premium to UniFirst’s closing price on February 7, 2022, the date of Cintas\u2019 Prior Proposal.<\/p>\n<\/li>\n<\/ul>\n
\nThe full text of the letters exchanged between Cintas and UniFirst from November 8, 2024, to the most recent on January 7, 2025, are included below.<\/p>\n
Letters Exchanged Between Cintas and UniFirst<\/span><\/b><\/p>\n
November 8, 2024<\/b><\/p>\n
\nRaymond C. Zemlin, Chairman of the Board of Directors
\n
Steven S. Sintros, President and Chief Executive Officer
\n
UniFirst Corporation
\n
68 Jonspin Road
\n
Wilmington, MA 01887<\/p>\n\nGentlemen:<\/p>\n
\nI have appreciated our prior discussions regarding the potential combination of UniFirst Corporation (\u201cUniFirst\u201d) with Cintas Corporation (\u201cCintas\u201d). As you know, we admire UniFirst for its track record of performance and the quality of its people. We firmly believe there is a compelling strategic and cultural fit between our two companies, and that Cintas would provide an excellent long-term home for UniFirst. Our combination would help maximize the success of UniFirst’s operations and people over the long-term.<\/p>\n
\nOn behalf of Cintas, I would like to express Cintas’ strong interest in pursuing a combination with UniFirst. To that end, we are pleased to submit this non-binding proposal (this \u201cProposal\u201d) to acquire UniFirst in a transaction with an implied total transaction value of approximately $5.2 billion. Specifically, we propose a transaction in which UniFirst shareholders will receive $275 per share for 100% of the outstanding UniFirst common and Class B shares. Common shareholders will receive value of approximately $4.2 billion and Class B shareholders will receive value of approximately $1 billion.<\/p>\n
\nThe proposed purchase price per share of $275 represents a 48% premium to UniFirst’s ninety-day average closing price. This price also represents a 54% premium to UniFirst’s closing price on February 7, 2022 when Cintas provided you an indication of interest to acquire UniFirst for $255 per share (the \u201cPrior Proposal\u201d).<\/p>\n
\nWe believe our Proposal represents a compelling proposition for UniFirst and its shareholders. We would like to emphasize the following characteristics of our Proposal in particular:<\/p>\n
- \n
- \nA combination of Cintas and UniFirst has a strong strategic and industrial logic, would create a leading company in the industry, better able to meet the challenges posed by continued and increasing competition from much larger and better-capitalized companies that are focused on increasing their garment and facility solutions and investing in last mile fleets;<\/p>\n<\/li>\n<\/ul>\n
- \n
- \nOur Proposal represents a meaningful increase from our Prior Proposal;<\/p>\n<\/li>\n<\/ul>\n
- \n
- \nThe proposed transaction would not be subject to any financing contingencies or approval by Cintas’ shareholders;<\/p>\n<\/li>\n<\/ul>\n
- \n
- \nWe have done substantial work on the regulatory front, including engaging leading antitrust lawyers at Davis Polk & Wardwell, LLP and economists at Compass Lexecon, and we are confident that we have a path to obtaining the regulatory approvals necessary to consummate the proposed transaction; and<\/p>\n<\/li>\n<\/ul>\n
- \n
- \nWe stand ready to commence and complete due diligence quickly, and to discuss and agree on the terms of a definitive agreement in parallel.<\/p>\n<\/li>\n<\/ul>\n
\nWe believe that your board members, as well as your shareholders, will enthusiastically support this Proposal. Interestingly, both Blackrock and The Vanguard Group are significant shareholders of both our companies.<\/p>\n
\nWe believe the employees of UniFirst will be critical to the long-term success of the combined company. Cintas has a history of providing leadership and growth opportunities across its global organization to employees of acquired businesses. At the appropriate time, we look forward to discussing the retention of key talent and the best way to integrate our respective teams to ensure successful leadership of the combined business. Our objective would be to ensure that UniFirst’s management and employees have the opportunity to develop and prosper within the Cintas organization.<\/p>\n
\nDuring several of my prior conversations with Steve as well as on your earnings calls, you discussed the importance of three critical areas of investment – CRM, Brand and ERP. Interestingly, we have identified technology and brand as significant priorities for Cintas in the coming years. The priorities of our organizations being well-aligned speaks to how important these areas are and the value that could be derived by putting our companies together and leveraging these subjects for the greater benefit of our collective employees, customers and shareholders. In addition, we would be able to better leverage our infrastructure and route networks to enhance service to our customers and prospects enabling us to better compete in an increasingly competitive environment. Our opportunities together are both compelling and exciting.<\/p>\n
\nThis proposal is non-binding and does not constitute, or create any legally binding obligation, liability or commitment by Cintas, or any of its affiliates, regarding the proposed transaction unless and until a definitive agreement is executed by Cintas and UniFirst. Cintas reserves the right to withdraw this proposal at its discretion.<\/p>\n
\nI want to assure you that the proposed transaction is a top priority within our organization. Our executive management and advisors are prepared to commence private engagement immediately. We are committed to devoting the required resources that are necessary to quickly and efficiently complete our due diligence and finalize mutually acceptable definitive agreements on customary terms for a transaction of this nature. Given our familiarity with UniFirst, we will require only the completion of limited business due diligence along with customary public company legal due diligence in order to proceed with the proposed transaction.<\/p>\n
\nOnce again, we believe there is no better time than now to combine our companies and create a world class organization to even further benefit our customers, employees and shareholders. We are excited about this opportunity and are prepared to move forward expeditiously. Please provide a formal, written response regarding this Proposal to me no later than November 22, 2024. We welcome the opportunity to discuss this Proposal with you at your convenience.<\/p>\n
\nSincerely,
\n
Todd M. Schneider
\n
President & Chief Executive Officer<\/p>\n\n__________<\/p>\n
November 25, 2024<\/b><\/p>\n
\nSent Via Email to Scott Chase, Secretary of UniFirst Corporation<\/p>\n
\nRaymond C. Zemlin, Chairman of the Board of Directors
\n
Steven S. Sintros, President and Chief Executive Officer
\n
UniFirst Corporation
\n
68 Jonspin Road
\n
Wilmington, MA 01887<\/p>\n\nGentlemen:<\/p>\n
\nSteve called me on Friday, November 22, 2024, to respond to our proposal from November 8, 2024 for the acquisition of 100% of the outstanding common and Class B shares of UniFirst (“UniFirst”) by Cintas Corporation (“Cintas”) for $275 per share (the “Proposal”). I understand from our conversation that UniFirst requires more time to respond to our Proposal. I want to reiterate that we believe the Proposal is extremely attractive to UniFirst and its shareholders.<\/p>\n
\nWe prefer to engage in discussions with UniFirst in private. We are ready to engage with you immediately to work towards a mutually acceptable definitive agreement, including the mix of consideration – cash or cash and stock – that would be most compelling to your shareholders. In connection with that, we would like to meet with you in person during the week of December 2nd to discuss deal terms and the path to completing a transaction. I will attend the meeting along with our CFO, General Counsel and outside counsel. Please let me know by Wednesday, November 27th<\/sup> which day next week is most convenient for your team to meet. At that point we can set a location for the meeting.<\/p>\n
\nAs we expressed in our November 8 letter, we firmly believe there is a compelling strategic and cultural fit between our two companies. A combination would create a leading provider of business services and enhance our collective ability to serve customers and support employees, including by accelerating the benefits of ongoing investments in technology. Together, Cintas and UniFirst would be better able to meet the challenges posed by continued and increasing competition from much larger and better-capitalized companies that are focused on increasing their garment and facility solutions and investing in last mile fleets.<\/p>\n
\nApproximately 79% of UniFirst common shares are held by investors which also own Cintas stock. Our Proposal would deliver compelling value to UniFirst shareholders, specifically a:<\/p>\n
- \n
- \n45% premium to UniFirst’s ninety-day average closing price as of November 22, 2024; and<\/p>\n<\/li>\n
- \n54% premium to UniFirst’s closing price on February 7, 2022 when Cintas provided you an indication of interest to acquire UniFirst for $255 per share (the “Prior Proposal”).<\/p>\n<\/li>\n<\/ul>\n
\nWe are prepared to move quickly and efficiently to finalize mutually acceptable definitive agreements on customary terms for a transaction of this nature, including:<\/p>\n
- \n
- Diligence.<\/b> We have followed UniFirst closely for many years and conducted extensive due diligence over that time. We expect to have limited and specific confirmatory due diligence requirements.\n<\/li>\n
- Timing.<\/b> We would work towards signing and announcing a definitive agreement before year-end.\n<\/li>\n
- Regulatory.<\/b> Cintas has engaged leading regulatory counsel and is confident in the path through regulatory review and closing.\n<\/li>\n
- Financing.<\/b> Our Proposal is not subject to any financing condition and any cash consideration would be financed from cash on hand, committed lines of credit and\/or other available sources of financing.\n<\/li>\n
- Certainty.<\/b> Our Board of Directors supports the proposed transaction. Cintas shareholder approval will not be required.\n<\/li>\n<\/ul>\n
\nI want to reiterate that the proposed transaction is a top priority within our organization, and we believe there is no better time than now to combine our companies and create a world class organization to even further benefit our customers, employees and shareholders. Cintas is committed to reaching a definitive agreement and to moving forward expeditiously. I look forward to discussing next steps this week and hearing back from you by November 27th<\/sup> on dates your team is available to meet in person next week.<\/p>\n
\nSincerely,
\n
Todd M. Schneider
\n
President & Chief Executive Officer<\/p>\n\n__________<\/p>\n
November 27, 2024<\/b><\/p>\n
\nTodd M. Schneider
\n
President and Chief Executive Officer
\n
Cintas Corporation
\n
6800 Cintas Boulevard
\n
Mason, Ohio 45040
\n
By email \u2013 [email address redacted<\/i>]<\/p>\n\nDear Todd,<\/p>\n
\nWe are in receipt of your letters dated November 8, 2024, and November 25, 2024, which included an unsolicited, non-binding and conditional proposal to acquire UniFirst at $275 per share.<\/p>\n
\nAfter careful consideration, the UniFirst Board of Directors has unanimously concluded that your proposal is not in the best interests of UniFirst, its shareholders and other stakeholders.<\/p>\n
\nSincerely,
\n
Raymond C. Zemlin
\n
Chairman of the Board of Directors<\/p>\n\nSteven S. Sintros
\n
President and Chief Executive Officer<\/p>\n\n__________<\/p>\n
December 3, 2024<\/b><\/p>\n
\nSent Via Email to Scott Chase, Secretary of UniFirst Corporation<\/p>\n
\nRaymond C. Zemlin, Chairman of the Board of Directors
\n
Steven S. Sintros, President and Chief Executive Officer
\n
UniFirst Corporation
\n
68 Jonspin Road
\n
Wilmington, MA 01887<\/p>\n\nGentlemen:<\/p>\n
\nI received your letter dated November 27, 2024 responding to my letter dated November 25, 2024 reiterating our proposal from November 8, 2024 to acquire 100% of the outstanding common and Class B shares of UniFirst (“UniFirst”) by Cintas Corporation (“Cintas”) for $275 per share (the “Proposal”). Your response is surprising given that in my conversation with Steve on November 22 he appeared to indicate serious consideration would be given to our Proposal, including with the help of outside advisors. Despite the fact that 79% of UniFirst common shares are held by investors that also own Cintas stock and the significant premium being offered to UniFirst shareholders, our invitation to meet with you directly to discuss our Proposal has once again been ignored. This is the second time in just under three years that you and your fellow directors have failed to have substantive engagement or discussions with Cintas regarding value-enhancing alternatives for shareholders. I am hopeful we can have further private discussions regarding our Proposal.<\/p>\n
\nIn our brief engagement in February 2022, you indicated that UniFirst believed that the execution of its strategic plan would deliver meaningful value to UniFirst shareholders. Yet, since February 7, 2022 when Cintas provided you an indication of interest to acquire UniFirst for $255 per share (the “Prior Proposal”), your stock has appreciated approximately 12%, approximately one-third of the 35% appreciation in the S&P 500 and well below the 134% appreciation in Cintas stock.<\/p>\n
\nWe believe that our Proposal offers a unique opportunity to deliver value to your shareholders and enhance our collective ability to serve customers and support employees, including by accelerating the benefits of ongoing investments in technology. There is no better time than now to combine our companies and create a world class organization to even further benefit our customers, employees and shareholders.<\/p>\n
\nWe remain prepared to move forward immediately with our Proposal of $275 per share in cash which would deliver certain and compelling value to UniFirst shareholders, specifically a:<\/p>\n
- \n
- \n44% premium to UniFirst’s ninety day average closing price as of December 2, 2024; and<\/p>\n<\/li>\n
- \n54% premium to UniFirst’s closing price on February 7, 2022, the date of our Prior Proposal.<\/p>\n<\/li>\n<\/ul>\n
\nWe prefer to engage with you in collaborative, private discussions with minimal disruption to your management team to reach a mutually acceptable definitive agreement. We want to meet with you in person during the week of December 9th, including discussions about potential sources of additional value that could allow us to increase our Proposal. As part of this direct engagement, we are also prepared to discuss a mix of cash and stock consideration if that is preferable to your shareholders.<\/p>\n
\nI want to reiterate that the proposed transaction is a top priority within our organization and we remain prepared to move quickly and efficiently to finalize mutually acceptable definitive agreements on customary terms for a transaction of this nature, including:<\/p>\n
- \n
- Diligence. <\/b>We expect to have limited and specific confirmatory due diligence requirements.\n<\/li>\n
- Timing.<\/b> We would work towards signing and announcing a definitive agreement before year-end.\n<\/li>\n
- Regulatory.<\/b> Cintas has engaged leading regulatory counsel and is confident in the path through regulatory review and closing. We are prepared to have our counsel immediately engage with you and your counsel to discuss the extensive work we have done to date (including with our economist) on the regulatory front and our path to closing of the transaction.\n<\/li>\n
- Financing.<\/b> Our Proposal is not subject to any financing condition and any cash consideration would be financed from cash on hand, committed lines of credit and\/or other available sources of financing.\n<\/li>\n
- Certainty.<\/b> Our Board of Directors supports the proposed transaction. Cintas shareholder approval will not be required.\n<\/li>\n<\/ul>\n
\nWe are very motivated to conclude a transaction that benefits both companies as well as our respective shareholders. We understand you are in the process of closing your first quarter but we look forward to your response no later than December 6, 2024.<\/p>\n
\nSincerely,
\n
Todd M. Schneider
\n
President & Chief Executive Officer<\/p>\n\n__________<\/p>\n
December 9, 2024<\/b><\/p>\n
\nTodd M. Schneider
\n
President and Chief Executive Officer
\n
Cintas Corporation
\n
6800 Cintas Boulevard
\n
Mason, Ohio 45040
\n
By email \u2013 [email address redacted<\/i>]<\/p>\n\nDear Todd,<\/p>\n
\nWe are in receipt of your letter dated December 3, 2024, requesting a meeting with UniFirst to discuss Cintas Corporation’s November 2024 unsolicited, non-binding, and conditional proposal to acquire UniFirst for $275 per share.<\/p>\n
\nAs stated in our letter dated November 27, 2024, the UniFirst Board of Directors carefully considered Cintas Corporation’s offer and unanimously concluded that the proposal is not in the best interests of UniFirst, its shareholders, and other stakeholders. In making its determination, the UniFirst Board of Directors considered the offer price, execution and business risks, feedback from some of UniFirst’s largest shareholders by voting power, and UniFirst’s future growth and value creation opportunities.<\/p>\n
\nAs such, we see no need for us to engage regarding your proposal.<\/p>\n
\nSincerely,
\n
Raymond C. Zemlin
\n
Chairman of the Board of Directors<\/p>\n\nSteven S. Sintros
\n
President and Chief Executive Officer<\/p>\n\n__________<\/p>\n
December 20, 2024<\/b><\/p>\n
\nSent Via Email to Scott Chase, Secretary of UniFirst Corporation<\/p>\n
\nRaymond C. Zemlin, Chairman of the Board of Directors
\n
Steven S. Sintros, President and Chief Executive Officer
\n
UniFirst Corporation
\n
68 Jonspin Road
\n
Wilmington, MA 01887<\/p>\n\nGentlemen:<\/p>\n
\nOn behalf of Cintas Corporation (“Cintas”), I am writing to reiterate our proposal to acquire 100% of the outstanding common and Class B shares of UniFirst Corporation (“UniFirst”) by Cintas for $275 per share in cash (the “Proposal”). In my continued effort to engage with you, I believe it’s appropriate to address each of the points in your letter dated December 9, 2024. I want to provide additional clarity on each point since these considerations formed the basis for the UniFirst Board of Directors to unanimously conclude that our Proposal is not in the best interest of UniFirst, its shareholders and other stakeholders.<\/p>\n
\nWith respect to price, we understand that UniFirst’s directors have unanimously concluded that a 44% premium offer to UniFirst’s ninety-day average closing price as of December 2, 2024 does not warrant a meeting to explore how a transaction with Cintas can deliver substantial value to your shareholders. Our Proposal represents an approximate premium of 55% over UniFirst’s closing price as of December 19, 2024. The rejection of our Proposal and the associated premium is surprising to us given UniFirst’s 2024 stock performance as well as its stock performance over the past few years. We are confident your common shareholders would find these premiums compelling since 79% of UniFirst common shares are held by investors that also own Cintas stock.<\/p>\n
\nIn your response, you reference UniFirst’s future growth and value creation opportunities. As indicated in our letter to you dated December 3, 2024, we are prepared to increase our Proposal above $275 per share should UniFirst’s value creation plan justify such an increase. We are also prepared to discuss the form and mix of consideration to make the transaction tax-efficient to all shareholders.<\/p>\n
\nAs part of the direct engagement we have proposed, we would like the opportunity to meet directly with Class B shareholders and the Croatti family so we can share ideas that would enable the UniFirst and Croatti legacy in our industry to continue into the future.<\/p>\n
\nFor example, Scott Farmer and I have discussed the possibility of Cynthia Croatti, or her designee, joining the Board of Directors of Cintas. We believe Cynthia’s many years of experience at UniFirst would offer meaningful contributions to our combined company, employees and customers.<\/p>\n
\nWe would also welcome a discussion regarding how this transaction would have minimal impact on UniFirst employees. At Cintas, we pride ourselves on being a great home for our employee-partners, and we believe UniFirst employees would feel the same way. UniFirst employees will be an important asset of our combined company. During our meeting, we’d be ready to share how and why we think bringing UniFirst employees into the Cintas family would be a win-win for everyone involved.<\/p>\n
\nWe are confident that we can reach acceptable deal terms and bridge any concerns if we engage directly with your key stakeholders.<\/p>\n
\nWith respect to execution and business risk, our executive management and advisors remain confident that there is an expeditious path to completing a transaction. We are prepared to commence direct engagement with you and your advisors immediately to promptly finalize mutually acceptable definitive agreements on customary terms for a transaction of this nature, including:<\/p>\n
- \n
- Diligence.<\/b> We expect to have limited and specific confirmatory due diligence requirements.\n<\/li>\n
- Timing.<\/b> We would work towards signing and announcing a definitive agreement in January, 2025.\n<\/li>\n
- Regulatory.<\/b> Cintas has engaged leading regulatory counsel and is confident in the path through regulatory review and closing. We are prepared to have our counsel immediately engage with you and your counsel to discuss the extensive work we have done to date (including with our economist) on the regulatory front and our path to closing the transaction.\n<\/li>\n
- Financing.<\/b> Our Proposal is not subject to any financing condition and any cash consideration would be financed from cash on hand, committed lines of credit and\/or other available sources of financing.\n<\/li>\n
- Certainty.<\/b> Our Board of Directors supports the proposed transaction. Cintas shareholder approval will not be required.\n<\/li>\n<\/ul>\n
\nOur Proposal offers a unique opportunity to deliver value to your shareholders and enhance our collective ability to serve customers and support employees, including by accelerating the benefits of ongoing investments in technology. Together, Cintas and UniFirst would be better able to meet the challenges posed by continued and increasing competition from much larger and better-capitalized companies that are focused on increasing their garment and facility solutions and investing in last mile fleets.<\/p>\n
\nI want to reiterate that the proposed transaction is a top priority within our organization. We are very motivated to conclude a transaction that benefits both companies as well as our respective customers, employees and shareholders. We urge you to engage with us and our advisors openly and without delay for the mutual benefit of our respective stakeholders.<\/p>\n
\nWe would like to meet with your deal team and\/or Class B shareholders in person no later than January 10, 2025 to discuss deal terms and the path to completing a transaction. Please let me know no later than January 3, 2025 which days your team is available to meet in person.<\/p>\n
\nSincerely,
\n
Todd M. Schneider
\n
President & Chief Executive Officer<\/p>\n\n__________<\/p>\n
January 7, 2025<\/b><\/p>\n
\nSent Via Email to Scott Chase, Secretary of UniFirst Corporation<\/p>\n
\nRaymond C. Zemlin, Chairman of the Board of Directors
\n
Steven S. Sintros, President and Chief Executive Officer
\n
UniFirst Corporation
\n
68 Jonspin Road
\n
Wilmington, MA 01887<\/p>\n\nGentlemen:<\/p>\n
\nOn behalf of Cintas Corporation (\u201cCintas\u201d), I am writing to reiterate our proposal to acquire 100% of the outstanding common and Class B shares of UniFirst Corporation (“UniFirst”) by Cintas for $275 per share in cash (the \u201cProposal\u201d). Our Proposal delivers compelling value to UniFirst shareholders, specifically a:<\/p>\n
- \n
- \n46% premium to UniFirst’s ninety\u00ad-day average closing price as of January 6, 2025;<\/p>\n<\/li>\n
- \n54% premium to UniFirst’s closing price on February 7, 2022 when Cintas provided you an indication of interest to acquire UniFirst for $255 per share (the “Prior Proposal”).<\/p>\n<\/li>\n<\/ul>\n
\nWe are disappointed that our continued efforts to engage in discussions on the basis of this Proposal have been rejected, despite the fact that 79% of UniFirst common shares are held by investors that also own Cintas stock and the significant premium being offered to UniFirst shareholders.<\/p>\n
\nThe terse response we received on November 27, 2024 rejecting our Proposal did not provide anything constructive on the economic terms or conditions of our Proposal. Our subsequent December 3, 2024 request for an in-person meeting, including our willingness to discuss potential sources of additional value that would allow us to increase our Proposal, was also rejected. Our most recent December 20, 2024 request for engagement included a willingness to discuss ways to preserve the UniFirst legacy and the potential to include Cynthia Croatti or her designee on the Cintas Board post a transaction.<\/p>\n
\nGiven your refusal to engage despite our best efforts to arrange collaborative discussions, we have determined it is prudent to publicize this letter, ensuring that UniFirst shareholders are aware of the immediate, certain and compelling value they stand to realize. Accordingly, we are issuing a press release with the contents of this letter and our prior correspondence.<\/p>\n
\nWe believe that our Proposal offers a unique opportunity to deliver value to your shareholders and enhance our collective ability to serve customers and support employees, including by accelerating the benefits of ongoing investments in technology. Like UniFirst, Cintas has a nearly century-long heritage and deep family roots, and Cintas greatly respects the Croatti family and UniFirst team and the way you serve your customers. Cintas would welcome UniFirst employees and ensure opportunities to develop and prosper within Cintas. Together, Cintas and UniFirst would be better able to meet the challenges posed by continued and increasing competition from much larger and better-capitalized companies that are focused on increasing their garment and facility solutions and investing in last mile fleets.<\/p>\n
\nOur executive management and advisors remain prepared to commence direct engagement with you and your advisors immediately to quickly and efficiently finalize mutually acceptable definitive agreements on customary terms for a transaction of this nature, including:<\/p>\n
- \n
- Diligence.<\/b> We expect to have limited and specific confirmatory due diligence requirements.\n<\/li>\n
- Timing. <\/b>We would work towards signing and announcing a definitive agreement in January 2025.\n<\/li>\n
- Regulatory. <\/b>Cintas has engaged leading regulatory counsel and is confident in the path through regulatory review and closing. We are prepared to have our counsel immediately engage with you and your counsel to discuss the extensive work we have done to date (including with a leading economics consulting group) on the regulatory front and our path to closing the transaction.\n<\/li>\n
- Financing.<\/b> Our Proposal is not subject to any financing condition and any cash consideration would be financed from cash on hand, committed lines of credit and\/or other available sources of financing.\n<\/li>\n
- Certainty. <\/b>Our Board of Directors supports the proposed transaction. Cintas shareholder approval will not be required.\n<\/li>\n<\/ul>\n
\nI want to reiterate that the proposed transaction is a top priority within our organization, and we believe there is no better time than now to combine our companies and create a world class organization to even further benefit our customers, employees and shareholders.<\/p>\n
\nWe are very motivated to conclude a transaction that benefits both companies as well as our respective shareholders. We urge you to engage with us and our advisors openly and without delay for the mutual benefit of our respective stakeholders.<\/p>\n
\nSincerely,
\n
Todd M. Schneider
\n
President & Chief Executive Officer<\/p>\nAdvisors<\/span><\/b><\/p>\n
\nBDT & MSD Partners is acting as Cintas\u2019 financial advisor, and Davis Polk & Wardwell LLP is serving as legal advisor.<\/p>\n
Cintas<\/span><\/b><\/p>\n
\nCintas Corporation helps more than one million businesses of all types and sizes get Ready\u2122 to open their doors with confidence every day by providing products and services that help keep their customers\u2019 facilities and employees clean, safe and looking their best. With offerings including uniforms, mats, mops, restroom supplies, first aid and safety products, fire extinguishers and testing, and safety training, Cintas helps customers get Ready for the Workday\u00ae. Headquartered in Cincinnati, Cintas is a publicly held Fortune 500 company traded over the Nasdaq Global Select Market under the symbol CTAS and is a component of both the Standard & Poor\u2019s 500 Index and Nasdaq-100 Index.<\/p>\n
Forward Looking Statements<\/span><\/b><\/p>\n
\nThis document contains statements that constitute “forward-looking statements” within the meaning of the federal securities laws. All statements other than statements regarding historical facts, including, without limitation, statements regarding our current expectations, estimates and projections about our industry, our business or a transaction with UniFirst Corporation (\u201cUniFirst\u201d), are forward-looking statements. We caution investors that any forward-looking statements are subject to risks and uncertainties that may cause actual results and future trends to differ materially from those matters expressed in or implied by such forward-looking statements. Investors are cautioned not to place undue reliance on forward-looking statements. Among the risks and uncertainties that could cause actual results to differ from those described in forward-looking statements are the following: the risk that a transaction with UniFirst may not be consummated; the risk that a transaction with UniFirst may be less accretive than expected, or may be dilutive, to Cintas\u2019 earnings per share, which may negatively affect the market price of Cintas common shares; the possibility that Cintas and UniFirst will incur significant transaction and other costs in connection with a potential transaction, which may be in excess of those anticipated by Cintas; the risk that Cintas may fail to realize the benefits expected from a transaction; the risk that the combined company may be unable to achieve anticipated synergies or that it may take longer than expected to achieve those synergies; the risk that any announcements relating to, or the completion of, a transaction could have adverse effects on the market price of Cintas common shares; and the risk related to any unforeseen liability and future capital expenditure of Cintas related to a transaction.<\/p>\n
\nFor additional factors affecting the business of Cintas, refer to Part I \u2013 Item 1A. Risk Factors of our Annual Report on Form 10-K for the fiscal year ended May 31, 2024 (the \u201c2024 10-K\u201d), and other filings with the U.S. Securities and Exchange Commission (the \u201cSEC\u201d).<\/p>\n
Important Information for Investors and Security Holders<\/span><\/b><\/p>\n
\nThis document relates to a proposal which Cintas has made for an acquisition of UniFirst. In furtherance of this proposal and subject to future developments, Cintas may file one or more registration statements, proxy statements, tender offer statements or other documents with the SEC. This document is not a substitute for any proxy statement, registration statement, tender offer statement or other document Cintas may file with the SEC in connection with the proposed transaction.<\/p>\n
\nInvestors and security holders of Cintas are urged to read the proxy statement(s), registration statement, tender offer statement and\/or other documents filed with the SEC carefully in their entirety if and when they become available as they will contain important information about the proposed transaction. Any definitive proxy statement(s) (if and when available) will be mailed to stockholders of Cintas, as applicable. Investors and security holders will be able to obtain free copies of these documents (if and when available) and other documents filed with the SEC by Cintas through the website maintained by the SEC at http:\/\/www.sec.gov<\/a>.<\/p>\n
No Offer or Solicitation; Participants in the Solicitation<\/span><\/b><\/p>\n
\nThis document shall not constitute an offer to sell or the solicitation of an offer to buy any securities, nor shall there be any sale of securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any jurisdiction. No offering of securities shall be made except by means of a prospectus meeting the requirements of Section 10 of the Securities Act of 1933, as amended.<\/p>\n
\nThis document is neither a solicitation of a proxy nor a substitute for any proxy statement or other filing that may be made with the SEC. Nonetheless, Cintas and its directors and certain of its executive officers may be considered participants in the solicitation of proxies in connection with the proposed transaction. Information about the directors and executive officers of Cintas is set forth in its proxy statement for its 2024 annual meeting of shareholders (the \u201c2024 Proxy Statement\u201d), which was filed with the SEC on September 19, 2024 and is available here<\/a>. Information about the directors and executive officers of Cintas, their ownership of Cintas common stock, and Cintas\u2019 transactions with related persons is set forth in the sections entitled \u201cElection of Directors\u201d, \u201cBoard Diversity\u201d, \u201cBoard\u2019s Roles and Responsibilities\u201d, \u201cBoard Committees and Meetings\u201d, \u201cNonemployee Director Compensation for Fiscal 2024\u201d, \u201cFiscal 2024 Director Compensation Table\u201d, \u201cCompensation Committee Report\u201d, \u201cExecutive Compensation\u201d, \u201cCompensation Discussion and Analysis\u201d, \u201cFiscal 2024 Summary Compensation Table\u201d, \u201cGrants of Plan-Based Awards for Fiscal 2024\u201d, \u201cOutstanding Equity Awards at Fiscal 2024 Year-End\u201d, \u201cOption Exercises and Stock Vested for Fiscal 2024\u201d, \u201cNonqualified Deferred Compensation for Fiscal 2024\u201d, \u201cPotential Payments upon Termination, Retirement or Change in Control\u201d, \u201cCEO Pay Ratio\u201d, \u201cPay Versus Performance\u201d, \u201cApproval, on an Advisory Basis, of Named Executive Officer Compensation\u201d, \u201cApproval of the Cintas Corporation 2016 Amended and Restated Equity and Incentive Compensation Plan\u201d, \u201cPrincipal Shareholders\u201d, \u201cSecurity Ownership of Director Nominees and Executive Officers\u201d, and \u201cRelated Party Transactions\u201d of the 2024 Proxy Statement. Information about the directors and executive officers of Cintas, their ownership of Cintas common stock, and Cintas\u2019 transactions with related persons is also set forth in the sections entitled \u201cSecurity Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters\u201d of the 2024 10-K, which was filed with the SEC on July 25, 2024 and is available here<\/a>. To the extent holdings of Cintas common stock by the directors and executive officers of Cintas have changed from the amounts of Cintas common stock held by such persons as reflected in the 2024 Proxy Statement and 2024 10-K, such changes have been or will be reflected on Statements of Change in Ownership on Form 4 filed with the SEC, including: the Form 4s filed by Robert Coletti on December 11, 2024<\/a> and November 1, 2024<\/a>, Joseph Scaminace on November 1, 2024<\/a>, Karen Carnahan on November 1, 2024<\/a>, Melanie Barstad on November 1, 2024<\/a>, Martin Mucci on November 1, 2024<\/a>, Beverly Carmichael on November 1, 2024<\/a>, and Ronald Tysoe on November 1, 2024<\/a>. Free copies of these documents may be obtained as described above.<\/p>\n
\nAny information concerning UniFirst contained in this document has been taken from, or based upon, publicly available information. Although Cintas does not have any information that would indicate that any information contained in this document that has been taken from such documents is inaccurate or incomplete, Cintas does not take any responsibility for the accuracy or completeness of such information. To date, Cintas has not had access to the books and records of UniFirst.<\/p>\n
<\/p>\n
View source version on businesswire.com: <\/span>https:\/\/www.businesswire.com\/news\/home\/20250106529496\/en\/<\/a><\/span><\/p>\n
Investors:<\/b> J. Michael Hansen, Executive Vice President & Chief Financial Officer \u2013 513-972-2079; Jared S. Mattingley, Vice President – Treasurer & Investor Relations – 513-972-4195<\/p>\n
Media:<\/b> Bryan Locke\/Lindsay Molk, FGS Global \u2013 cintas@fgsglobal.com<\/a><\/p>\n
KEYWORDS:<\/b> Ohio United States North America<\/p>\n
INDUSTRY KEYWORDS:<\/b> Other Professional Services Other Retail Other Manufacturing Textiles Chemicals\/Plastics Professional Services Manufacturing Retail<\/p>\n
- Timing. <\/b>We would work towards signing and announcing a definitive agreement in January 2025.\n<\/li>\n
- Diligence.<\/b> We expect to have limited and specific confirmatory due diligence requirements.\n<\/li>\n
- Timing.<\/b> We would work towards signing and announcing a definitive agreement in January, 2025.\n<\/li>\n
- Timing.<\/b> We would work towards signing and announcing a definitive agreement before year-end.\n<\/li>\n
- Diligence. <\/b>We expect to have limited and specific confirmatory due diligence requirements.\n<\/li>\n
- Timing.<\/b> We would work towards signing and announcing a definitive agreement before year-end.\n<\/li>\n
- Diligence.<\/b> We have followed UniFirst closely for many years and conducted extensive due diligence over that time. We expect to have limited and specific confirmatory due diligence requirements.\n<\/li>\n
- \nWe stand ready to commence and complete due diligence quickly, and to discuss and agree on the terms of a definitive agreement in parallel.<\/p>\n<\/li>\n<\/ul>\n
- \nWe have done substantial work on the regulatory front, including engaging leading antitrust lawyers at Davis Polk & Wardwell, LLP and economists at Compass Lexecon, and we are confident that we have a path to obtaining the regulatory approvals necessary to consummate the proposed transaction; and<\/p>\n<\/li>\n<\/ul>\n
- \nThe proposed transaction would not be subject to any financing contingencies or approval by Cintas’ shareholders;<\/p>\n<\/li>\n<\/ul>\n
- \nOur Proposal represents a meaningful increase from our Prior Proposal;<\/p>\n<\/li>\n<\/ul>\n
- \nA combination of Cintas and UniFirst has a strong strategic and industrial logic, would create a leading company in the industry, better able to meet the challenges posed by continued and increasing competition from much larger and better-capitalized companies that are focused on increasing their garment and facility solutions and investing in last mile fleets;<\/p>\n<\/li>\n<\/ul>\n
- Clear Path to Completion:<\/b> Cintas has conducted significant work on the regulatory front, including with leading regulatory counsel and other advisors, and is confident in the path through regulatory review and closing.\n<\/li>\n<\/ul>\n
- Delivering Compelling, Immediate and Certain Value for UniFirst and Cintas Shareholders<\/b>:Under the terms of the Proposal, UniFirst shareholders would receive an immediate and compelling 46% premium for their UniFirst shares in cash. The proposed acquisition is expected to be accretive to Cintas shareholders and would unlock attractive operating cost synergies for the combined company. 79% of UniFirst common shares are held by investors that also own Cintas stock.\n<\/li>\n<\/ul>\n
- Opportunity for UniFirst Team: <\/b>Like UniFirst, Cintas has a nearly century-long heritage and deep family roots, and Cintas greatly respects the Croatti family and UniFirst team and the way they serve their customers. An enduring value at Cintas is the importance of its employees, whom it calls \u201cpartners,\u201d sharing collectively in the Company\u2019s success. Cintas would welcome UniFirst employees and ensure opportunities to develop and prosper within Cintas.\n<\/li>\n<\/ul>\n
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