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Aramark Board OKs Plan By Investor Group To Acquire Company In $8.3 Billion Merger

Posted On: 9/4/2006

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PHILADELPHIA -- Aramark Corp. announced the signing of a definitive merger agreement under which its chairman and chief executive officer, Joseph Neubauer, and investment funds managed by GS Capital Partners, CCMP Capital Advisors and J.P. Morgan Partners, Thomas H. Lee Partners and Warburg Pincus LLC will acquire the company. The transaction is valued at about $8.3 billion, including the assumption or repayment of some $2 billion of debt.

The plan offers Aramark stockholders $33.80 in cash for each share of the company's common stock. The company's board has approved the agreement, upon the unanimous recommendation of a special committee made up of independent directors, and will recommend that shareholders approve the merger.

The transaction is expected to be completed late this year or early in 2007, subject to stockholder and regulatory approvals and the satisfaction of other customary closing conditions. In addition to the vote required under Delaware law, the transaction is subject to an additional approval by stockholders in which each share owned by Joseph Neubauer will have only one vote, rather than the 10 votes to which they are entitled.

Aramark, originally Automatic Retailers of America, was formed in 1959 when West Coast vending pioneer Davre Davidson combined Davidson Bros. a firm he and his brother Henry had established before World War II, with Automatic Merchandising Co., another pioneering operation founded in Chicago by William Fishman.

The company, which continued to grow by acquisition, went public in 1960. In 1961, it acquired Slater Co., the nation's largest contract foodservice operation, and ARA established its national headquarters in Philadelphia in the following year. In 1969, its name changed to ARA Services, reflecting its expansion into such related businesses as concession operations and industrial and institutional uniform, environmental, healthcare and child care services.

In 1984, Davidson and Fishman worked with new chief executive officer Joseph Neubauer to take the company private again, fighting off a hostile takeover attempt. Neubauer, who had joined ARA in 1979 as chief financial officer, went on to take the company -- renamed Aramark in 1994 -- public again in 2001.

Commenting on the merger plan, Neubauer said, "We are proud to partner with this distinguished group of private equity firms, all of which have outstanding reputations and proven records of success. They are committed to working with us in building long-term solutions that deliver the most value for our clients and customers. They understand our business, share our mindset, and will be strong partners moving forward."

He emphasized that "Our success is driven by the ongoing efforts of our 240,000 employees around the world. I want to thank them for their and assure them we will remain focused on sustaining profitable growth by delivering outstanding environments, experiences and outcomes for our clients."