Aramark sets pricing for €400M senior notes due 2033

Aramark (market capitalization: $9.38 billion), a leader in food, facilities management, and uniforms, has announced the pricing of a private offering of €400 million in senior unsecured notes with a 4.375% interest rate, set to mature in 2033. This financial move was disclosed today, as the company aims to manage its debt more efficiently. According to InvestingPro data, the company currently maintains total debt of $6.22 billion.

The notes, issued by Aramark’s indirect wholly owned subsidiary, Aramark International Finance S.à r.l., are part of a strategic effort to address upcoming financial obligations. Specifically, the proceeds from this offering will be used to repay the €325 million of the Issuer’s 3.125% Senior Notes due on April 1, 2025, in full at maturity. The remaining funds will be allocated for general corporate purposes. InvestingPro analysis reveals the company maintains a GOOD financial health score, with revenue growth of 5.84% in the last twelve months.

Aramark has indicated that this transaction is designed to be net leverage neutral, which suggests the company is not intending to increase its overall debt levels. This could be an important consideration for investors tracking the company’s financial health and leverage strategy. InvestingPro data shows the company operates with a current ratio of 0.94 and has maintained dividend payments for 12 consecutive years, though it faces challenges with relatively weak gross profit margins of 15.48%.

The offering of these notes is scheduled to close on March 19, 2025, contingent upon meeting customary closing conditions. It is worth noting that the notes are being offered privately, in accordance with exemptions from the registration requirements of the Securities Act of 1933. This means that the offering is limited to qualified institutional buyers and certain non-U.S. persons outside the United States.

The company has clarified that this announcement does not constitute an offer to sell or a solicitation to buy the notes, as they have not been registered under the Securities Act and cannot be sold in the U.S. without registration or an exemption from registration requirements.

The information in this article is based on a press release statement.

In other recent news, Aramark reported first-quarter earnings that fell short of analyst expectations, with adjusted earnings per share at $0.39 compared to the projected $0.48. The company’s revenue reached $4.55 billion, below the anticipated $4.62 billion, although it did mark a 3% increase year-over-year. Aramark highlighted record adjusted operating income in its Global Food and Support Services segment, with operating income rising 30% year-over-year to $217 million. In efforts to manage its capital structure, Aramark announced a €400 million notes offering through its subsidiary to refinance existing debt and secured a $1.395 billion term loan to enhance financial flexibility. This loan will mature in June 2030 and is intended to refinance existing loans and redeem senior notes due in 2025. UBS recently adjusted its price target for Aramark to $45, maintaining a Buy rating, citing ongoing margin recovery as a key factor. Additionally, Aramark has begun repurchasing shares as part of its $500 million buyback program, acquiring over 645,000 shares for approximately $25 million. The company remains optimistic about its growth potential, reaffirming its full-year fiscal 2025 outlook with projected organic revenue growth of 7.5% to 9.5%.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.