On Monday, Aramark, an American food service, facilities, and uniform services provider, announced that it would acquire Avendra, LLC, majority owned by Marriott International Inc., and AmeriPride Services, a uniform rental and linen supply company in North America, for a total of $2.35 billion in separate deals. These acquisitions are said to bring growth and strengthen the company’s competency in its various fields of businesses.
Avendra and AmeriPride Acquisitions
Aramark said it would hand Avendra $1.35 billion, or $1.05 billion in net purchase price after adjusting for anticipated tax benefits.
Marriott, which holds a 55 percent stake in Avendra, said it would receive about 650 million from the sale.
On the other hand, AmeriPride would be procured for $1 billion, which came in at $850 million after adjusting for anticipated tax benefits, the company said.
The company also added that it expected cost synergies of about $40 million from the purchase of Avendra and about $70 million from AmeriPride, which it expects would be fully realized by the third and fourth fiscal year, respectively, after closing.
“Today is a historic day at Aramark as we announce it 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,” said Eric J. Foss, Aramark’s Chairman, President, and CEO.
“We have been executing successfully against our clear and focused strategy and have substantially elevated our operating performance and financial flexibility. These strategic and financially compelling transactions represent the next step in our commitment to drive sustainable shareholder value.”
Avendra is the dominating hospitality procurement services provider in North America, managing around $5 billion yearly purchasing spend for over 650 companies at more than 8,500 sites, including over half of the top 30 hotel chains. It was founded in 2001 by five hospitality leaders: Marriott, Hyatt, Fairmont Hotels, Club Corp, 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,” said 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.”
AmeriPride is on the forefront of uniform and linen rental and supply industry in the U.S. and Canada, with yearly revenue of approximately $600 million.
“AmeriPride is a highly-respected company with a tremendous legacy that will extend and complement Aramark’s uniform business,” Foss said.
“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.”
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