Dive Brief:
- Aramark Corp.has filed documents with the SEC laying out its plans for an initial public offering—returning the company to the public markets for a third time.
- The foodservice powerhouse plans to price shares between $20 and $23. At the high end of the range it could value the company as high as $12 billion.
- All that translates to a hefty payday for the management team and inside investors who control the company. If things go according to plan, they would pull in some $3 billion in profit.
Dive Insight:
We live in an era of financial engineering, in which how one manages a business has less to do with success than how one packages and repackages its finances. That's business today. Still, it takes a particular sort of executive to play the same game over and over and over again.
This IPO is the third for the company, and the second led by Joseph Neubauer, chairman of the foodservice and vending powerhouse. Neubauer led a buyout of the company in 1984, then took it public again in 2001, then brought in private equity partners to take it private once more in 2007.
As a result, Aramark has billions of dollars in debt (the company actually borrowed $722 million to pay insiders a special dividend) and the largest shareholder in the company is the private equity firm of Warburg Pincus, After the IPO, Aramark will have billions of dollars in debt and the largest shareholder will be—the private equity firm of Warburg Pincus.
And by the way, sales are about where they were four years ago.
The entire process reminds us of the similar fascination with profit-through-finances rather than profit-through-profits seen in Dole's obsession with the privatization and IPO merry-go-round.
