FTC tells Cintas it will sue to block $5.5 billion UniFirst takeover

Business customers who rent uniforms and buy facility services would face one fewer national supplier if the deal closes, which is the market-share question FTC staff have raised. UniFirst shareholders would lose a payout worth roughly 28% above the stock's $250.40 close on 27 October if the deal dies. Neither side has said what remedies, if any, would settle the case.

The FTC signals it will sue

Semafor reported on Tuesday 27 October that FTC staff told Cintas the agency intends to sue to block the $5.5 billion UniFirst acquisition, citing people familiar with the discussions. The commission has not formally voted to oppose the deal, and a final meeting with the companies before a potential lawsuit has not taken place. An FTC spokesperson told Semafor: "The FTC has not voted on a final decision in this transaction. Any decision will not be communicated through the press." Staff have privately raised concerns about the combined company's market share. Cintas did not respond to Semafor's requests for comment.

What changes for buyers and shareholders

The deal would combine two of North America's largest workwear and facility services providers, covering uniform rental, workplace cleaning products and related services. The central question is whether the combination leaves business customers with fewer competitive options. Cintas frames it as a way to cut costs by merging delivery routes, plants and supply chains. Size is the point: Cintas has a market value of $89.71 billion against UniFirst's $5.06 billion.

UniFirst shares fell 10.5% on 27 October to close at $250.40, and Cintas fell 5%, Yahoo Finance reported. Semafor reported larger drops of 12% and 6%. Under terms shareholders approved in June, each share gets $155 in cash plus 0.772 Cintas shares. At Cintas's 27 October price that is worth roughly $320, about 28% above the close. The cash-and-stock mix means the payout moves with Cintas's share price, not only with the FTC's decision.

The payout, the fee and the price without a deal

Cintas agreed in March to buy UniFirst for $310 per share in cash and stock, an enterprise value of about $5.5 billion. That is well above UniFirst's $250.40 close on 27 October. It was Cintas's third try after two failed attempts, following at least three formal approaches since 2022. The agreement carries a $350 million reverse termination fee payable by Cintas to UniFirst if antitrust enforcers block the merger.

Strip out the bid and UniFirst is priced on its own earnings. Normalized earnings per share have been flat near $8 for three fiscal years, at $8.10 in fiscal 2026. Analysts expect $8.39 in fiscal 2027 and $9.33 the year after, a 15% rise on fiscal 2026.

Before the selloff, UniFirst traded at 33 times forward earnings. Its five-year average is 25 times.

What happens next

On 2 October both companies told the FTC they had substantially complied with its second request and agreed not to close before 11 December unless the agency ends its investigation sooner. Cintas still says it expects the acquisition to close by the end of 2026. If the FTC sues, Cintas could fight in court or offer to sell parts of the business to settle, and the timing of any settlement depends on how fast the two sides agree on remedies.

Semafor contrasted the Cintas scrutiny with the clearance of Paramount's $110 billion acquisition of Warner Bros. Discovery, saying the Cintas case suggests regulators may still pursue aggressive antitrust enforcement when deals raise competition concerns.