Hospitality supplier Aramark is buying the Minnetonka-based uniform and linen rentals giant AmeriPride Services Inc. for $1 billion, company officials announced late Sunday.
Once completed, the deal — priced at a net $850 million after tax benefits — will give Aramark an additional $600 million in annual sales plus about 115 production and service facilities across the United States and Canada. AmeriPride is a 125-year-old family-owned company with 5,800 employees across North America, including 775 in Minnesota.
Aramark officials said in a statement they expect to realize $70 million in cost synergies after the deal closes. It's expected to finalize by Dec. 31, pending regulatory approvals.
AmeriPride will become a wholly owned subsidiary of Aramark, AmeriPride spokesman Ben Saukko said.
Aramark, which has 270,000 employees and "team members" in 19 countries, provides food service, facilities management and uniforms for customers around the globe. It has been looking for ways to expand, especially in the uniforms supply business.
"AmeriPride is a highly respected company with a tremendous legacy that will extend and complement Aramark's uniforms business," Aramark President and CEO Eric J. Foss said in a statement. "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."
The deal marks the second Aramark has announced this week. The company on Sunday said it will buy the hospitality supply company Avendra LLC for $1.35 billion before the end of the year.
Aramark officials noted that after both deals are finalized, the new Aramark will be a leading uniform services provider with enhanced scale and capabilities and nearly 500,000 customers. The transaction is expected to "bolster Aramark's competitive position in the U.S., and immediately establish a strong position in Canada," officials said.