Aramark to Go Private Again After Buyout

Aramark Corp. headquarters is shown in Philadelphia on Wednesday, Dec. 20, 2006. Aramark Corp., the nation's largest foodservice company, will be taken private for the second time in 22 years after shareholders on Wednesday overwhelmingly approved a $6.3 billion leveraged buyout bid. (AP Photo/Matt Rourke) (Matt Rourke - AP)

PHILADELPHIA -- Aramark Corp., the nation's largest foodservice company, will be taken private for the second time in 22 years after shareholders on Wednesday approved a $6.3 billion leveraged buyout bid.

It will also be the second time long-running Chief Executive Joseph Neubauer leads an investment group to take Aramark private. The first was in 1984, to thwart a hostile takeover from corporate raiders. The company went public again in 2001.

More than 95 percent of 375 million votes cast at the meeting approved of the bid, the company said.

"We believe Aramark's economic value will be more directly aligned with our performance, allowing us to create more opportunities for our employees and greater value for our clients, our customers and our communities," Neubauer said in a statement after the vote.

Neubauer's group _ which includes the private equity units of Goldman Sachs and JPMorgan plus the private investment firm Thomas H. Lee Partners _ offered to buy the company in August for $33.80 per share in cash.

The group will also assume $2 billion of debt in the deal.

Neubauer will convert his 8.5 million Aramark shares, valued at $250 million, into an ownership stake in the company once it goes private. The transaction is expected to close as early as January.

Neubauer made the move because he believes that Aramark's shares do not adequately reflect the value of the business and performance, according to filings with the Securities and Exchange Commission. He wants Aramark to escape the pressure of having to meet Wall Street's quarterly expectations.

Neubauer will have a $1 million salary, which the board would be able to increase, but not decrease, under the terms of the deal.

Two proxy firms, Institutional Shareholder Services, or ISS, and Proxy Governance Inc., had recommended that shareholders accept the offer. Pat McGurn, special counsel at ISS, said a special committee of directors hired advisers to shop around but a better offer did not emerge.

With annual sales of $11.6 billion, Aramark employs about 240,000 people with clients in 18 nations. In addition to food services, the company also manages facilities and supplies uniforms.

Aramark shares rose 11 cents to close at $33.46 on the New York Stock Exchange.