Elis SA’s Acquisition Approach to Vestis

Summary

By Anirban Sen and Milana Vinn

(Reuters) – French workplace supplies provider Elis SA has approached Vestis, the former uniform rentals business of Aramark, with an acquisition offer, according to sources.

Elis first approached Vestis, which is valued at about $3.3 billion including debt, a few weeks ago, with discussions remaining confidential. Details about the offer remain unknown.

There is no certainty that Vestis will accept the deal, as another buyer might emerge, and a deal may not happen at all, according to the sources.

Following the news, Vestis’ shares surged nearly 15%, leading to a brief trading halt on Thursday. Meanwhile, Elis shares fell 9.6% on Friday after the Reuters report.

Neither Elis nor Vestis responded immediately to requests for comments.

Vestis has been an acquisition target after facing recent underperformance due to losing key customers, resulting in a 35% decline in its share price this year. This contrasts with the 17% rise of the S&P 500 Diversified Support Services Index in the same timeframe.

Vestis’ shares began trading last year following a tax-free spin-off from Aramark.

Activist investor Corvex Management, led by hedge fund veteran Keith Meister, acquired a stake in Vestis post a profit warning after first-quarter results. In June, Vestis appointed Meister to its board.

Earlier this year, Vestis was also hit with a class action lawsuit from a shareholder alleging the company made misleading growth forecasts that caused a $1 billion valuation loss for shareholders.

Elis, with a market value of about 9.2 billion euros ($10.2 billion) including debt, is a workplace supplies provider offering uniform maintenance services.

($1 = 0.9024 euros)