Report: FTC intends to block $5.5 billion Cintas-UniFirst deal
Key Facts
The U.S. Federal Trade Commission told Cintas and UniFirst it intends to block their merger in court, according to a report published by Semafor and carried by Investing.com on October 27. The report attributed the information to unnamed sources, and the commission has not published an official announcement confirming that it filed suit. The reported challenge followed a regulatory review that included a request for additional information from both parties. The deal involves a merger the companies value at about $5.5 billion in total enterprise value. Shares of both companies fell in trading that day after the report, while the source did not specify an official competition-related reason for the commission's position.
Under the deal, UniFirst shareholders will receive $155.00 in cash and 0.7720 shares of Cintas for each eligible share upon completion. The companies valued the total enterprise value at about $5.5 billion, equivalent to 8.0 times trailing 12-month adjusted EBITDA at run rate. This includes about $375 million in expected operating savings. Cintas said when announcing the deal that it expected to achieve those savings over four years through costs related to materials, production, service, sales and administrative expenses. The companies also said the combined company would serve about 1.5 million business customers in North America.
The deal underwent an extensive review by the Federal Trade Commission before the report that it intended to challenge it emerged. On June 11, 2026, the parties received a second request for information and documents from the commission. On October 2, each certified that it had substantially complied with the request, and they signed a timing agreement barring completion of the deal before December 11. The agreement allows the deal to close before that date if the commission notifies the companies in writing that it has closed its investigation. In Canada, the parties received a supplemental information request from the Competition Bureau on July 2, then confirmed on September 29 that they had completed their response.
Cintas said in a filing with the U.S. Securities and Exchange Commission that it still expects to complete the deal before the end of 2026, subject to the satisfaction or waiver of customary closing conditions. That outlook comes as the U.S. review remains in focus following the report that the commission intends to block the deal, and after the parties completed their response to the Canadian information request. More than 99% of votes cast at UniFirst's special meeting on June 11 supported the acquisition, representing about 95% of the company's total outstanding shares. The result reflects shareholders' position, but does not replace the regulatory reviews that remain part of the closing process. December 11 remains the date before which the parties agreed not to complete the deal, unless the commission closes its investigation in writing earlier.
Shares of both companies posted declines in trading on October 27, according to Investing.com. Cintas shares fell 6% after dropping as much as 7.5% during the session, their steepest decline since December 2024. UniFirst fell 9% after an early drop of 17%, its worst trading performance since March 2025. These moves differ from the previous session's closes before the report: Cintas closed at $225.93, and UniFirst at $279.64 on October 26. Those closing prices therefore show the shares' levels before the October 27 news emerged, while the intraday declines document the market's reaction on the day it was published.
The deal dates to the March 2026 announcement, when the companies valued the enterprise at about $5.5 billion and set the cash-and-stock consideration for UniFirst shareholders. At the time, the implied value of the consideration per share was $306.53 on March 10, the last trading day before the merger agreement was announced. At UniFirst, consolidated revenue in the fourth quarter of its 2026 fiscal year rose 5.0% to $645.0 million. The company attributed the increase mainly to organic growth in its uniform solutions and facility services segments. The regulatory path and the agreement not to complete the deal before December 11 are expected to remain decisive factors in the timing, while Cintas maintains its expectation of closing before the end of 2026.