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CINCINNATI - Cintas Corporation (NASDAQ:CTAS), a major provider of specialized services to businesses with a market capitalization of $78.57 billion and a "GOOD" financial health rating according to InvestingPro, announced today that it has ceased negotiations with UniFirst Corporation (NYSE:UNF) regarding its previous proposal to purchase all outstanding shares of UniFirst. The proposed acquisition, at $275.00 per share in cash, represented a 46% premium over UniFirst’s ninety-day average closing price as of January 6, 2025.
Todd Schneider, President and CEO of Cintas, expressed that despite efforts to reach a mutual agreement that would benefit both customers and shareholders, the company was unable to engage substantively with UniFirst on key terms of the transaction. "While we continue to believe in the merits of a transaction, we were unable to have substantive engagement with UniFirst regarding key transaction terms. We do not believe further discussions are warranted at this time," Schneider stated. The company maintains impressive financial metrics, including industry-leading gross margins of 49.62% and robust revenue growth of 8.12% over the last twelve months.
Cintas has indicated that it will persist with its growth strategy, focusing on disciplined mergers and acquisitions as well as investing in technology to foster innovation and efficiency. Schneider emphasized the company’s commitment to creating value, citing its talented team, unique culture, and superior products and services. For detailed analysis of Cintas’s growth potential and comprehensive valuation metrics, investors can access the full Pro Research Report available on InvestingPro, which covers over 1,400 top US stocks with expert insights and actionable intelligence.
The announcement follows weeks of discussions between the two companies, which have now concluded without an agreement. Cintas, headquartered in Cincinnati, supports over one million businesses with products and services designed to ensure facilities and employees are clean, safe, and presentable.
The information is based on a press release statement from Cintas Corporation.
In other recent news, Cintas Corporation has proposed to acquire UniFirst Corporation for $275 per share in cash, valuing UniFirst at approximately $5.3 billion. This offer represents a 46% premium over UniFirst’s 90-day average closing price. Despite the attractive premium, UniFirst’s board has unanimously rejected the proposal, citing it as not in the best interest of the company and its stakeholders. Cintas has been persistent in its acquisition efforts, having previously made an offer in February 2022, which was also declined. The potential merger is expected to undergo antitrust scrutiny, adding complexity to the deal’s completion.
Cintas’s recent hostile takeover bid for UniFirst has been highlighted by Truist Securities, which maintained a Buy rating on Cintas with a price target of $215.00. The proposed acquisition could significantly benefit shareholders, although initial resistance from UniFirst’s controlling shareholders poses challenges. Additionally, RBC Capital maintained a Sector Perform rating on Cintas, noting a moderation in revenue growth for the second quarter of 2025 due to weaker catalog and direct sales. Despite this, Cintas has achieved revenue growth and margin expansion that surpass industry standards, attributed to its strategic focus and digital transformation initiatives. These developments reflect ongoing strategic maneuvers and financial performance considerations for Cintas and its investors.
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