Why UniFirst Stock Is Rocketing Higher Again Today
Key Points
Cintas announced plans to acquire UniFirst for roughly $5.5 billion, or $310 per share.
The deal will consist of $155 in cash and 0.772 shares of Cintas for each share of UniFirst stock owned.
The deal makes a lot of sense, but it may take time to produce any extra profits.
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Shares of North America's second-largest uniform and facilities services specialist, UniFirst (NYSE: UNF), are up 10% as of noon ET on Wednesday after the company announced it accepted a $5.5 billion acquisition offer from industry-leading peer, Cintas (NASDAQ: CTAS). The deal will see Cintas acquire UniFirst for roughly $310 per share, consisting of $155 in cash and 0.772 shares of Cintas for each UniFirst share owned by stockholders.
If at first you don't succeed...
Cintas has had its eye on its smaller (but largest) peer for years now. In 2022, they offered UniFirst $255 per share to buy the company -- a roughly 43% premium at the time. That deal was fended off. Then, in December 2025, Cintas tried again, offering $275 per share, but was again denied. Now it appears the two have finally agreed to terms at an improved $310 per share -- perhaps at the insistence of activist investment firm Engine Capital, which holds a 3% stake in UniFirst and has argued in favor of an acquisition.
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Should the deal go through, Cintas would increase its industry-leading market share in the uniform rental, facilities services, and first aid niches and look to save $375 million through operating cost synergies. That said, the deal may not be an immediate "slam dunk" for Cintas shareholders. UniFirst is in the middle of an enterprise resource planning transition, which complicates the company's integration and may temporarily delay cost savings and weigh on profitability. Furthermore, while Cintas has nearly been a 10-bagger over the last decade, UniFirst stock has only doubled -- primarily thanks to Cintas' repeated attempts to buy it, which have pushed its price higher.
Said another way, UniFirst isn't nearly as efficient an operator as Cintas, so it may take a few years for the newly combined company to mesh and take off. Cintas now trades at a lofty 43 times earnings, so the market has the blue chip dividend stock priced for perfection that may be hard to deliver right away as it integrates UniFirst into its operations.
Should you buy stock in UniFirst right now?
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Josh Kohn-Lindquist has no position in any of the stocks mentioned. The Motley Fool recommends Cintas. The Motley Fool has a disclosure policy.
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