8-KMaterial Agreements

CINTAS CORP 8-K Report, Material Agreement (Jul 21, 2015)

Filed July 21, 2015For Securities:CTAS

Summary

Cintas Corporation (CTAS) announced a significant development in its joint venture (JV) related to document destruction, recycling, and ancillary services. The company has entered into an agreement for Stericycle, Inc. to acquire all equity interests in the JV Partnership. This transaction is a key exit strategy for Cintas from its 42% stake in the JV, which was formed on April 30, 2014, by combining Cintas's and Shred-it's respective businesses. Investors should note the substantial financial impact of this divestiture. Cintas is expected to receive a cash payment of approximately $550 million to $600 million before taxes for its JV interest. This sale represents a material change in Cintas's business structure and a significant cash inflow, which will likely be a key focus for the company's financial strategy moving forward. The transaction is subject to customary closing conditions and regulatory approvals.

Key Highlights

  • 1Cintas Corporation has agreed to sell its stake in a document destruction and recycling joint venture.
  • 2The buyer is Stericycle, Inc.
  • 3Cintas holds a 42% equity interest in the joint venture partnership.
  • 4The transaction is expected to result in a pre-tax cash payment to Cintas of approximately $550 million to $600 million.
  • 5The joint venture was initially formed on April 30, 2014, with Shred-it International Inc.
  • 6The transaction is subject to regulatory approvals and other customary closing conditions.

Frequently Asked Questions

Cintas has entered into an agreement for Stericycle, Inc. to acquire all equity interests in the joint venture partnership that combines Cintas's and Shred-it's document destruction, recycling, and related services businesses. Cintas holds a 42% stake in this JV Partnership.

Cintas is expected to receive a cash payment ranging from approximately $550 million to $600 million before taxes in exchange for its 42% interest in the joint venture.

The joint venture was initially formed on April 30, 2014, as a result of an agreement between Cintas Corporation and the shareholders of Shred-it International Inc.

Yes, the obligations of the parties to consummate the transaction are conditioned upon obtaining regulatory approvals and the satisfaction of other customary closing conditions.