Takeover possibility adds to its appeal

Article Excerpt

A key reason behind our enthusiasm for spinoffs is that the newly spun-off firm could become an attractive takeover target. For example, several firms would probably be interested in buying Aramark’s uniforms business following its spinoff in order to take on industry leader Cintas. Even if a takeover fails to materialize, the split at Aramark will let both compaines focus on their main operations to unlock value. ARAMARK CORP. $30 is a buy. The company (New York symbol ARMK; Manufacturing & Industry sector; Shares outstanding: 257.3 million; Market cap: $7.7 billion; Dividend yield: 1.5%; Takeover Target Rating: Medium; www.aramark.com) operates in two main areas: it’s a leading food-services provider and concessions manager, serving a wide range of customers, including corporations, healthcare facilities, prisons, sports stadiums, and national parks. This division operates in North America through its Food and Support Services North America unit and outside the continent through FSS International. The company also supplies work uniforms and related services through its Uniform and Career Apparel segment. In…

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