Cintas Corporation (Nasdaq:CTAS) announced today an agreement
with the shareholders of Shred-it International Inc. to combine Cintas’
Document Shredding business with Shred-it’s Document Shredding business.
Under the agreement, Cintas and Shred-it will each contribute its
document shredding business to a newly formed partnership that will be
owned 42% by Cintas and 58% by the shareholders of Shred-it. The
combined entity will operate under the Shred-it brand and is expected to
have annual revenues in excess of $600 million. In addition to its 42%
ownership of the partnership, Cintas will receive approximately $180
million in cash at the closing of the transaction.
“We are confident that this transaction is the best path forward for our
Document Shredding customers, our workforce and our shareholders,” said
Scott D. Farmer, Cintas’ Chief Executive Officer. “Together, we expect
that Cintas Document Shredding and Shred-it will be the industry leader,
benefitting from increased scale, resources and strong cash flow to
uniquely position the new company to provide world class information
protection services to its customers.”
Following completion of the transaction, the combined company will be
led by Vince DePalma, current President and Chief Executive Officer of
Shred-it, who will become the President and Chief Executive Officer of
the newly formed company, and Karen Carnahan, now President and Chief
Operating Officer of Cintas’ Document Management Division, who will
become Chief Operating Officer of the newly formed company.
Karen Carnahan stated, “The Cintas Document Shredding team is excited to
join forces with Shred-it to create a global leader in document
destruction services. Shred-it has been a strong and well respected
competitor over the years, and we look forward to working together to
bring innovative ideas and superior customer service to our combined
customer base.”
The transaction, which was approved by Cintas’ Board of Directors, is
expected to close before Cintas’ fiscal year end which is May 31, 2014,
subject to the customary closing conditions and various approvals.
With regards to Cintas’ Global Document Storage and Imaging business,
Cintas is currently exploring strategic opportunities for this business
and will provide additional details in the future as appropriate.
Cintas will hold a conference call on Wednesday, March 19, 2014, after
the market closes to discuss its third quarter fiscal 2014 results and
this transaction. A live webcast of the call will be available to
individual investors and the public beginning at 5:00pm, Eastern Time,
on Wednesday, March 19, 2014.
The webcast will be available at www.Cintas.com
(click on the webcast icon and then follow instructions). For those
unable to listen to the live webcast, a replay will be available on the
Company's web site beginning approximately two hours after the
completion of the live call and will remain available for two weeks.
Questions concerning the webcast or conference call should be directed
to Judy Girty at (513) 573-4915 or girtyj@cintas.com.
About Cintas
Headquartered in Cincinnati, Cintas Corporation provides highly
specialized services to businesses of all types primarily throughout
North America. Cintas designs, manufactures and implements corporate
identity uniform programs, and provides entrance mats, restroom
supplies, first aid, safety, fire protection products and services and
document management services for over one million businesses. Cintas is
a publicly held company traded over the Nasdaq Global Select Market
under the symbol CTAS and is a component of the Standard & Poor’s 500
Index.
About Shred-it
Shred-it is a world-leading information security company providing
document destruction services that ensure the security and integrity of
its clients’ private information. Shred-it has operations in 17
countries worldwide, servicing more than 180,000 global, national and
local businesses, including the world’s top intelligence and security
agencies, more than 500 police forces, 1,500 hospitals, 8,500 bank
branches and 1,200 universities and colleges. For more information,
please visit www.shredit.com.
CAUTION CONCERNING FORWARD-LOOKING STATEMENTS
The Private Securities Litigation Reform Act of 1995 provides a safe
harbor from civil litigation for forward-looking statements. Forward-looking
statements may be identified by words such as “estimates,”
“anticipates,” “predicts,” “projects,” “plans,” “expects,” “intends,”
“target,” “forecast,” “believes,” “seeks,” “could,” “should,” “may” and
“will” or the negative versions thereof and similar words, terms and
expressions and by the context in which they are used. Such
statements are based upon current expectations of Cintas and speak only
as of the date made. You should not place undue reliance on any
forward-looking statement. We cannot guarantee that any
forward-looking statement will be realized. These statements are
subject to various risks, uncertainties, potentially inaccurate
assumptions and other factors that could cause actual results to differ
from those set forth in or implied by this Press Release. Factors
that might cause such a difference include, but are not limited to, the
ability and timing to satisfy the closing conditions to consummate the
transaction with Shred-it, including the receipt of government and other
approvals; the Shred-it partnership’s ability to promptly and
effectively integrate the Cintas Document Shredding business with
Shred-it’s Document Shredding business; the Shred-it partnership’s
ability to realize any synergies from the combination of the Cintas
Document Shredding business with Shred-it’s Document Shredding business;
the ability to successfully explore strategic opportunities for the
Cintas Global Document Storage and Imaging business; the possibility of
greater than anticipated operating costs including energy and fuel
costs, lower sales volumes, loss of customers due to outsourcing trends,
the performance and costs of integration of acquisitions, fluctuations
in costs of materials and labor including increased medical costs, costs
and possible effects of union organizing activities, failure to comply
with government regulations concerning employment discrimination,
employee pay and benefits and employee health and safety, uncertainties
regarding any existing or newly-discovered expenses and liabilities
related to environmental compliance and remediation, the cost, results
and ongoing assessment of internal controls for financial reporting
required by the Sarbanes-Oxley Act of 2002, disruptions caused by the
inaccessibility of computer systems data, the initiation or outcome of
litigation, investigations or other proceedings, higher assumed sourcing
or distribution costs of products, the disruption of operations from
catastrophic or extraordinary events, the amount and timing of
repurchases of our common stock, if any, changes in federal and state
tax and labor laws, the reactions of competitors in terms of price and
service and the ultimate impact of the Affordable Care Act. Cintas
undertakes no obligation to publicly release any revisions to any
forward-looking statements or to otherwise update any forward-looking
statements whether as a result of new information or to reflect events,
circumstances or any other unanticipated developments arising after the
date on which such statements are made. A further list and
description of risks, uncertainties and other matters can be found in
our Annual Report on Form 10-K for the year ended May 31, 2013 and in
our reports on Forms 10-Q and 8-K. The risks and uncertainties
described herein are not the only ones we may face. Additional risks and
uncertainties presently not known to us or that we currently believe to
be immaterial may also harm our business.
Copyright Business Wire 2014