Tuesday, May 26, 2015

Aramark partners could collect $3B IPO profit: report

From $8.3 billion to $11-12 billion since 2006

Aramark partners could collect $3B IPO profit: report

Eric J. Foss has been the chief executive of Aramark Corp. since May 2012.
Eric J. Foss has been the chief executive of Aramark Corp. since May 2012.

"The timing is right," given the current fat stock prices in the food industry, for Aramark Corp.'s planned public stock offering that would take the Philadelphia cafeteria-service giant public for the third time, says analyst Vicki Bryan in a report for Gimme Credit LLC.

If Aramark's stock boosts its market capitalization to the expected $11 or $12 billion, or 9 to 10 times estimated 2013 earnings (before income tax, depreciation, amortization) of 1.2 billion, "this implies a tidy profit" over the $8.3 billion (not quite 9 times EBITDA) that Aramark sold for in August 2006, when the company was taken private by Chairman Joseph Neubauer and his partners at GS (Goldman Sachs) Capital Partners, CCMP Advisors, JPMorgan, Thomas H. Lee Partners, Warburg Pincus LLC.

"Aramark's operation shave been steadily improving over the past three years" with growing sales and profits, and the company has refinanced debt to cut finance costs, Bryan added. Aramark will strengthen its position further if it uses significant proceeds to pay down "several billion of the total $6.2 billion debt," mostly owed to banks. 

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PhillyDeals posts drafts, transcripts and updates of Joseph N. DiStefano's columns and stories about Philly-area business, which he's been writing since 1989.

DiStefano studied economics, history and a little engineering at Penn and taught writing at St. Joseph's. He has written thousands of columns and articles for the Inquirer, Bloomberg and other media, wrote the book Comcasted, and raised six children with his wife, who is a saint.

Reach Joseph N. at JoeD@phillynews.com, distefano251@gmail.com, 215.854.5194 or 302.652.2004.

Reach Joseph N. at JoeD@phillynews.com or 215 854 5194.

Joseph N. DiStefano