Aramark Agrees to Buyout By Private-Equity Investors

Aramark Agrees to Buyout By Private-Equity Investors

Aramark Agrees to Buyout By Private-Equity Investors

Food-service provider Aramark Corp. said Tuesday it agreed to a sweetened acquisition offer by an investor group led by its chief executive, a deal valued at $8.3 billion, including $2 billion in debt.

Under the terms of the offer, shareholders of Aramark will receive $33.80 in cash for each share of Aramark common stock they hold. The offer gives shareholders about a 2% premium from Monday's closing price of $33.05.

The offer tops a $32 a share bid in May by the same buyout group. Some shareholders were unsatisfied with the earlier offer and recommended the board pursue a leveraged recapitalization through a large Dutch tender offer. Aramark shares soared back in May when the first buyout offer was made, pushing the company's shares above the offer price.

Aramark shares were down nearly 1% at $32.75 in premarket trading on Inet.

The company said the transaction, if approved, is expected to be completed by late 2006 or early 2007, subject to receipt of stockholder approval and regulatory approvals, as well as satisfaction of other customary closing conditions.

The investor group includes Aramark CEO Joseph Neubauer and investment funds managed by GS Capital Partners, CCMP Capital Advisors and J.P. Morgan Partners, Thomas H. Lee Partners and Warburg Pincus LLC.

"We are proud to partner with this distinguished group of private equity firms, all of which have outstanding reputations and proven records of success," said Mr. Neubauer in a statement. "They are committed to working with us in building long-term solutions that deliver the most value for our clients and customers."

The company said its board, on the unanimous recommendation of a special committee comprised entirely of independent directors, has approved the buyout and will recommend that Aramark stockholders approve the deal.

In May, Mr. Neubauer and the private-equity group proposed taking the firm private in a transaction valuing the company at $5.94 billion, or $32 a share. Aramark, which went public in December 2001, said its board formed a special committee of independent directors to consider the proposal at that time. For its fiscal year ended Sept. 30, the company reported net income of $288.5 million, or $1.53 a share, on sales of $10.96 billion.

Philadelphia-based Aramark said the transaction will be financed through a combination of equity contributed by Mr. Neubauer and investment funds managed by GS Capital Partners, CCMP Capital Advisors and J.P. Morgan Partners, Thomas H. Lee Partners and Warburg Pincus LLC, and debt financing provided by J.P. Morgan Chase Bank., J.P. Morgan Securities Inc. and Goldman Sachs Credit Partners LP.

There is no financing condition to the obligations of the group of investors led by Mr. Neubauer to consummate the transaction.

Credit Suisse Securities is acting as financial adviser to the special committee and Shearman & Sterling LLP is acting as legal advisor to the special committee.

Credit Suisse has delivered a fairness opinion to the special committee. Goldman, Sachs & Co. and J.P. Morgan Securities Inc. are acting as financial advisers to the private equity investors. Simpson Thacher & Bartlett LLP, Sullivan & Cromwell LLP and Wachtell, Lipton, Rosen & Katz are acting as legal advisers to the private equity investors and Mr. Neubauer.

Boutique executive search services with best in class global network, contacts and market mastery.

Deeply connected and engaged personal service approach, long-term investment in client community and 25 year history of strong relations with both Multi-National leaders and Private Equity partners.