When G&K Services announced Tuesday it would be acquired by rival Cintas Corp. for $2.2 billion, it was only the latest Minnesota-based public company this year to receive a $1 billion-plus takeover offer.
The deal will further thin the ranks of the Star Tribune 100 list of Minnesota's largest public companies.
In March, Minneapolis-based Valspar Corp. announced it would be acquired by rival coatings manufacturer Sherwin Williams for $11.3 billion. In April, St. Jude Medical announced it would be acquired by Abbott Laboratories for about $25 billion, one of the 10 largest U.S.. deals this year.
Mairs & Power, the St. Paul-based investment advisory firm, runs the Mairs & Power Balanced, Growth and Small Cap mutual funds. It has long had success investing in Midwest public companies. Mairs is a years long holder of hundreds of thousands of shares in G&K, Valspar and St. Jude.
"It's a little bit disappointing to lose another one of our locally-based companies," said Andy Adams, lead manager of the Small Cap fund and co-manager of the Growth." But I don't think you can say it's not a shareholder friendly deal."
Adams credits G&K CEO Doug Milroy, who streamlined during lean-revenue years and brought profitability in line with G&K's peer group. "He's done a nice job cleaning up the company and then getting a nice price on the sale." Adams said.
Meanwhile the Mairs & Power Small Cap fund has recently hit its five year anniversary. It's the younger sibling to the Mairs & Power Growth Fund established in 1959, and the Mairs and Power Balanced Fund (launched 1961). The Small Cap fund started in August 2011.
As of September the firm will close the Small Cap fund to new investors. The fund has enjoyed good performance and has experienced significant but manageable asset flows.The move was made to maintain stable and balanced growth of the Small Cap fund. The Growth and Balanced funds remain open to new investors.
