UniFirst Corp (UNF) Completes $122M Acquisition of Arrow Uniform
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UniFirst Corporation (NYSE: UNF) announced today that it has completed its acquisition of Arrow Uniform for approximately $122 million. The all-cash transaction is structured as an asset acquisition, with UniFirst acquiring substantially all of Arrow’s assets and virtually none of its liabilities.
UniFirst is a leading provider of workplace uniforms and facility service (FS) programs to businesses, large and small, within a wide range of industries throughout the United States and Canada. Arrow Uniform (Arrow) is also a uniform and FS service provider, headquartered in Taylor, Mich., with 12 locations and nearly 700 employees in five Midwestern states.
Ronald D. Croatti, UniFirst President and Chief Executive Officer, said, “Arrow is a high-quality organization with a solid reputation in the marketplace and a culture based on delivering service excellence to its business customers. The company has been a strong participant in our industry since 1937 and we’re very pleased to have them join the UniFirst family.” Mr. Croatti added, “Through this acquisition, UniFirst further strengthens its market presence in the greater Michigan and surrounding areas, a strong business environment for uniform and facility service programs we provide. This improved service coverage will help us better serve existing and prospective local, regional, and national customers in this area of the country.”
UniFirst expects the Arrow acquisition to add approximately $62 to $65 million to its revenues for fiscal year 2017. UniFirst also expects the deal to be dilutive to earnings in FY 2017, partially the result of non-cash purchase accounting charges.
Mr. Croatti continued, “Business acquisitions have historically been an integral part of UniFirst’s growth strategy, and we’ll continue to seek out opportunities that make sense for us and meet our long-term business goals. After the closing of the Arrow deal, we’ll still have approximately $240 million in cash on-hand and significant borrowing capacity available under our line of credit for additional acquisitions and/or other capital allocation options.”
The company will provide more details concerning its acquisition of Arrow, as well as its overall outlook for its next fiscal year, in its upcoming fourth-quarter earnings call.
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