Aramark, a provider of food services and uniforms, has set the initial terms of its IPO, according to its most recent S-1 filing. The company plans to offer 36.6 million shares at a range of $20-$23. If the deal is struck at the high end, Aramark will raise roughly $834 million.
Aramark’s roots go all the way back to 1959, and since then, the company has built a global platform. The company provides services to 86% of the Fortune 500 and serves more than 500 million consumers per year. Oh, and the company’s uniforms are worn by more than 2 million people each day.
Because of its steady cash flows as well as barriers to entry, Aramark has attracted several buyouts. The latest transaction occurred in 2007, for $8.3 billion. The private equity sponsors included GS Capital Partners, CCMP Capital Advisors, JPMorgan Partners, Thomas H. Lee Partners and Warburg Pincus LLC. There was also participation from 250 senior management personnel.
The recession of 2009 was certainly a big issue. But Aramark has been able to cut back on costs while snagging new clients such as Airbus, the Ohio and Michigan departments of corrections, American University, and several NFL teams.
But growth has still been tepid. For the fiscal year ended Sept. 27, revenues came to $13.9 billion, barely up from $13.5 billion. Cash flows remain juicy, however — up to $1.2 billion in the latest fiscal year.
As for the IPO, Aramark plans to list on the NYSE under the ticker of ARMK and the lead underwriters include Goldman Sachs (GS), J.P. Morgan (JPM), Credit Suisse (CS), Morgan Stanley (MS), Barclays (BCS), BofA Merrill Lynch (BAC), RBC Capital Markets and Wells Fargo Securities (WFC).
Tom Taulli runs the InvestorPlace blog IPO Playbook. He is also the author of High-Profit IPO Strategies, All About Commodities and All About Short Selling. Follow him on Twitter at @ttaulli. As of this writing, he did not hold a position in any of the aforementioned securities.