Cintas Corp to buy G&K Services in $2.2 bln deal

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Published: August 16, 2016 7:07:54 PM

Cintas Corp, which sells and leases uniforms, said it would buy smaller rival G&K Services Inc for about $2.2 billion, including debt, to strengthen its presence in the United States and Canada.

Cintas will pay .93 billion in cash, according to Reuters calculations. G&K's long-term debt, net of current maturities, stood at 0.45 million as of March 26. (Source: Cintas.com)Cintas will pay .93 billion in cash, according to Reuters calculations. G&K?s long-term debt, net of current maturities, stood at 0.45 million as of March 26. (Source: Cintas.com)

Cintas Corp, which sells and leases uniforms, said it would buy smaller rival G&K Services Inc for about $2.2 billion, including debt, to strengthen its presence in the United States and Canada.

Cintas’s offer of $97.50 per share represents a premium of about 19 percent to G&K’s Monday close.

G&K Services shares jumped 18 percent to $96.97 in premarket trading on Tuesday, while Cintas’ shares were up 5.5 percent.

Cintas will pay $1.93 billion in cash, according to Reuters calculations. G&K’s long-term debt, net of current maturities, stood at $240.45 million as of March 26.

Cincinnati-based Cintas provides uniforms, floor care, restroom supplies, first aid and safety products, fire extinguishers and testing, and safety and compliance training to a variety of industries.

The deal is expected to generate annual savings of $130 million to $140 million, realized in the fourth year after closing, Cintas said.

The company expects the deal to close in the next four to six months.

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