Uniform maker Vestis fields takeover interest from buyout firms, sources say

Elis SA

10/12/2024 14:35

By Milana Vinn
       NEW YORK, Dec 10 (Reuters) - Advent International and
Apollo Global Management  APO.N  are among the buyout firms
exploring a potential acquisition of uniform supplier Vestis
 VSTS.N , according to people familiar with the matter.
    Roswell, Georgia-based Vestis has been working with its
financial advisers to evaluate interest from potential suitors,
since the company first received an acquisition offer from
French rival Elis SA, Reuters reported in September. Elis
 ELIS.PA  later pulled out of the talks, citing a need to
maintain "financial discipline." 
    Private equity firm Clayton Dubilier & Rice has also
expressed interest in bidding for Vestis, one of the sources
cited above said, requesting anonymity as the discussions are
confidential.
    The potential acquirers submitted initial bids for Vestis in
recent weeks, the sources said, cautioning that a deal is not
guaranteed and that Vestis could opt to stay independent. 
    Vestis did not immediately respond to requests for comment.
Advent, Apollo and CD&R declined to comment.
    Vestis became an acquisition target after the company
slashed its fiscal-year earnings and revenue guidance in May,
causing its shares to tank. Activist investor Corvex, which is
led by hedge fund veteran Keith Meister, took a stake in Vestis
following its first-quarter results. In June, Vestis appointed
Meister to its board of directors.
    Vestis, which has a market value of about $2.1 billion, has
given up nearly 23% of its value this year, underperforming the
S&P 500 Diversified Support Services index  .SPLRCDSSR . The
company had total outstanding debt of about $1.2 billion, as of
Sept. 27. 
    Vestis has recently displayed early signs of a turnaround,
after cutting costs, reducing its debt pile and revamping its
sales strategy to focus on generating more business from large
customers. In November, the company issued full-year earnings
and revenue guidance that was roughly in line with market
expectations, sending its shares up 13%. 

 (Reporting by Milana Vinn in New York; Editing by Leslie Adler)
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