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Warburg to retain biggest Aramark stake after $800m-plus IPO

3 Dec 2013

chef cooking restaurantUS private equity firm Warburg Pincus plans to remain the biggest stakeholder in food services business Aramark Holdings following the company’s IPO, which could raise more than $800m.

Aramark plans to sell 28 million shares at between $20 and $23 each with other stockholders looking to offload another 8.3 million, valuing the business at about $5.3bn.

The company filed to raise $100m by listing its shares on the New York Stock Exchange in  September, although that figure was just a placeholder to help calculate fees.

Aramark was taken private by a consortium of investors including GS Capital Partners, Thomas H Lee Partners and Warburg Pincus in an $8.3bn deal in 2006.

Those investors each hold just over 21 per cent of the business, while CCMP Capital Investors and JP Morgan Partners own about 10.5 per cent each.

Warburg will be the biggest shareholder following the IPO despite seeing its stake drop from 21.5 per cent to 18.2 per cent.

The initial buyout included the assumption of about $2bn of debt, which had grown to more than $4.6bn at the end of June this year according to a filing with the US securities regulator.

Aramark said it planned to use capital raised from the IPO to pay back some of that debt.

The business had net profits of $102m last year on $13.5bn of revenues.

It provides food, facilities and uniform services to education, healthcare, business and industry and sports, leisure and corrections clients.

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