UNF - UniFirst may be possible acquisition target for Cintas

Uniform maker UniFirst-Corp. ( NYSE: UNF ) may be a potential acquisition candidate for Cintas ( NASDAQ: CTAS ) based on some comments Cintas made on Thursday and some recent flight tracking data, according to Gordon Haskett.

"We don't comment specifically on M&A, but what I can tell you is this that we are actively pursuing deals of all shapes and sizes," Cintas ( CTAS ) CEO Todd Schneider said in response to analyst's question on the company's M&A interest on its Q4 earnings call on Thursday. "And certainly, valuations matter certainly. But it really takes two to dance. And for the right situation to occur – an owner, an organization, or shareholders of an organization [have] to be willing sellers."

UniFirst ( UNF ) would be a logical target for Cintas ( CTAS ), especially as Cintas is unlikely to pursue Aramark's ( ARMK ) uniform business, which the company is in the process of spinning out. A combination of Cintas and Aramark's uniform division would likely have trouble passing antitrust regulators, Gordon Haskett's Don Bilson wrote in a note on Friday.

Bilson also noted that Aramark ( ARMK ) is focused on spinning out its uniform business, rather than selling it. Aramark confirmed in May that its plans to separate its uniform business. A combination of Cintas ( CTAS ) and UniFirst ( UNF ) could also draw U.S. regulatory scrutiny.

Any potential sale of UniFirst ( UNF ) is unlikely be done without the approval of its founding family, the Croatti's, according to Bilson, who suggested that the "shareholders" comment from the Cintas CEO might a possible reference to getting approval from UniFirst holders.

UniFirst ( UNF ) has a market cap of $3.3 billion, while Cintas ( CTAS ) has a valuation of about $39 billion. UniFirst shares rose 1% in regular trading on Friday.

While Cintas ( CTAS ) CEO Schneider's comments may be telling, the biggest clue on a potential UniFirst ( UNF ) deal may be flight tracking data, according to Bilson. UniFirst's ( UNF ) corporate jet was spotted in Cintas's headquarters of Cincinnati in late May.

Also see SA contributor Alex Pitti's piece from April entitled "UniFirst Investing To Compete With Cintas."

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