Aramark Considers IPO

The venue concessions company went private in 2007 by then CEO Joseph Neubauer and a group of investors. The timing and valuation of the upcoming IPO has not been decided, and the company is shopping banks to manage the deal, sources told the Wall Street Journal.
If the company launches an IPO, it will do so with a new CEO: Eric Foos, who was hired in May 2012 after being a top manager at PepsiCo. Aramark will also bring with it a debt from the original buyout – $5.4 billion in long-term borrowings as of the end of the last fiscal year versus $1.1 billion in EBITDA, according to the WSJ.

Neubauer contributed $250 million to take the company private alongside private equity firms Warburg Pincus, Thomas H. Lee Partners, CCMP Capital Investors and GS Capital Partners, a unit of Goldman Sachs. Each owns about 21 percent of the company and Neubauer, now chairman, holds 10 percent, according to securities filings. Aramark had approximately $13.5 billion in sales during the fiscal year ended Sept. 28.

The IPO would arrive in a financial climate where private equity firms have been pursuing several IPOs amid a rise in share prices and increased interest in equities by large investors, the WSJ said.

Aramark, which provides concessions and uniforms to stadiums, arenas, schools and hospitals worldwide, was founded in 1936 by a man show sold peanuts out of the back of a Dodge.  Neubauer joined the company in 1979 and in 1984 fought off a hostile takeover by management buyout. He took the company public again in 2001.

If another IPO occurs, it would mark a rare occurrence where a chief exec took a company public twice, the paper noted.