Cintas Corporation Announces Agreement to Purchase ZEE Medical
By Business Wire News
By Business Wire News
Cintas Corporation (Nasdaq: CTAS) announced that it has entered into a definitive agreement to purchase ZEE Medical from McKesson Corporation for consideration of approximately $130 million in cash. The transaction is expected to close on August 1, 2015.
This acquisition, with expected annual revenue of $110 million to $120 million, expands Cintas’ footprint in van delivered first aid, safety, training and emergency products and allows the company to serve an even greater number of customers in North America.
Cintas CEO Scott Farmer said, “ZEE Medical was the pioneer in van delivered first aid and safety services. We believe that this acquisition will help us continue to maximize our long-term value for our shareholders, while positioning us to provide an even greater array of products and services for our customers.”
Cintas provided initial fiscal 2016 guidance on July 17, 2015, for revenue to be in the range of $4.70 billion to $4.78 billion, and earnings per diluted share to be in the range of $3.74 to $3.83. Updated fiscal 2016 guidance to give effect to the ZEE Medical acquisition will be provided in September when fiscal 2016 first quarter results are announced and the details of the purchase accounting are finalized.
CAUTION CONCERNING FORWARD-LOOKING STATEMENTS
The Private Securities Litigation Reform Act of 1995 provides a safe harbor from civil litigation for forward-looking statements. Forward-looking statements may be identified by words such as “estimates,” “anticipates,” “predicts,” “projects,” “plans,” “expects,” “intends,” “target,” “forecast,” “believes,” “seeks,” “could,” “should,” “may” and “will” or the negative versions thereof and similar words, terms and expressions and by the context in which they are used. Such statements are based upon current expectations of Cintas and speak only as of the date made. You should not place undue reliance on any forward-looking statement. We cannot guarantee that any forward-looking statement will be realized. These statements are subject to various risks, uncertainties, potentially inaccurate assumptions and other factors that could cause actual results to differ from those set forth in or implied by this Press Release. Factors that might cause such a difference include, but are not limited to, the successful completion of the acquisition of ZEE Medical; our ability to promptly and effectively integrate ZEE Medical; our ability to realize any synergies from the acquisition of ZEE Medical; the successful completion of the sale of Cintas’ investment in the Shred-it partnership within the expected timeframe or at all; the possibility of greater than anticipated operating costs including energy and fuel costs; lower sales volumes; loss of customers due to outsourcing trends; the performance and costs of integration of acquisitions; fluctuations in costs of materials and labor including increased medical costs; costs and possible effects of union organizing activities; failure to comply with government regulations concerning employment discrimination, employee pay and benefits and employee health and safety; uncertainties regarding any existing or newly-discovered expenses and liabilities related to environmental compliance and remediation; the cost, results and ongoing assessment of internal controls for financial reporting required by the Sarbanes-Oxley Act of 2002; disruptions caused by the inaccessibility of computer systems data; the initiation or outcome of litigation, investigations or other proceedings; higher assumed sourcing or distribution costs of products; the disruption of operations from catastrophic or extraordinary events; the amount and timing of repurchases of our common stock, if any; changes in federal and state tax and labor laws; the reactions of competitors in terms of price and service; and the ultimate impact of the Affordable Care Act. A further list and description of risks, uncertainties and other matters can be found in our Annual Report on Form 10-K for the year ended May 31, 2015 and in our reports on Forms 10-Q and 8-K. The risks and uncertainties described herein are not the only ones we may face. Additional risks and uncertainties presently not known to us or that we currently believe to be immaterial may also harm our business.
Headquartered in Cincinnati, Ohio, Cintas Corporation provides highly specialized services to businesses of all types primarily throughout North America. Cintas designs, manufactures and implements corporate identity uniform programs, and provides entrance mats, restroom supplies, first aid, safety and fire protection products and services. Cintas is a publicly held company traded over the Nasdaq Global Select Market under the symbol CTAS and is a component of the Standard & Poor’s 500 Index.
J. Michael Hansen, Vice President-Finance and Chief Financial Officer, 513-701-2079
Paul F. Adler, Vice President and Treasurer, 513-573-4195