SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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Amendment No. 1 to
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of The Securities Exchange Act of 1934
November 30, 2001
Date of Report (Date of earliest event reported)
Commission file number: 001-16807
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ARAMARK CORPORATION
(Exact name of registrant as specified in its charter)
Delaware 23-3086414
(State of Incorporation) (I.R.S. Employer identification No.)
ARAMARK Tower
1101 Market Street
Philadelphia, Pennsylvania 19107
(Address of principal executive offices)
Telephone Number: 215-238-3000
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Item 2. ACQUISITION OR DISPOSITION OF ASSETS
On November 30, 2001 ARAMARK Corporation (the "Company" or "ARAMARK")
completed the acquisition of the management services division of The
ServiceMaster Company, referred to herein as ServiceMaster Management Services.
The aggregate consideration for the transaction is approximately $790 million
in cash, subject to post closing adjustments, plus costs of the acquisition.
ServiceMaster Management Services is a leader in the provision of facility
management services in the United States, providing a complete range of facility
management services to the healthcare, education and business and industry
client sectors. The facility management services provided include custodial
services, plant operations and maintenance, groundskeeping, technical support
and food services. ServiceMaster Management Services also has operations in
Canada and maintains licensing arrangements with local service providers in
approximately 25 other countries.
The Company believes that the acquisition of ServiceMaster Management
Services will further enhance its position as a leading provider of outsourced
services. The Company believes the acquisition will enable it to strengthen its
portfolio of services by broadening its facility services base in the United
States and internationally. In addition, the Company believes the acquisition
will provide ARAMARK with additional strategic benefits, including
opportunities to cross-sell food and support services and other outsourced
services to ServiceMaster Management Services' existing clients.
The Company financed the acquisition and related expenses in an aggregate
of approximately $800 million by borrowing approximately an additional $200
million under the Company's senior revolving credit facility and $600 million
under a new bridge financing facility with a group of banks. Approximately $350
million of the bridge facility was repaid with a portion of the proceeds from
the Company's initial public offering of Class B common stock. The remaining
balance of the bridge loan was repaid in April 2002 with a portion of the
proceeds from the Company's $300 million 7% senior note offering.
Item 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS
The following financial statements, pro forma financial information and
exhibits were filed as part of this Report:
(a) Financial statements of ServiceMaster Management Services pursuant
to Rule 3-05 of Regulation S-X were previously filed with this report on
December 10, 2001, and are incorporated herein by reference.
(b) Pro Forma financial information required pursuant to Article 11 of
Regulation S-X:
UNAUDITED PRO FORMA FINANCIAL INFORMATION
The following unaudited pro forma financial information for the nine-months
ended June 28, 2002 is provided pursuant to Article 11 of Regulation S-X. The
unaudited pro forma financial information for the fiscal year ended September
28, 2001 was previously filed with this report on December 10, 2001. The
unaudited pro forma financial statements give pro forma effect to the
acquisition by ARAMARK of ServiceMaster Management Services for approximately
$800 million in cash (the "Acquisition"). The unaudited pro forma consolidated
statement of income was prepared as if the Acquisition occurred as of the
beginning of ARAMARK's 2001 fiscal year.
The pro forma adjustments are based upon available information and
assumptions that ARAMARK believes are reasonable. The pro forma adjustment to
reflect the allocation of the purchase price is based upon the preliminary
information currently available, which may be revised, as additional information
becomes available. The notes to the unaudited pro forma financial statements
provide a more detailed discussion of how such adjustments were derived and
presented in the pro forma financial statements. Such financial statements have
been compiled from historical financial statements and other information, but do
not purport to represent what ARAMARK's financial position or results of
operations actually would have been had the transactions occurred on the date
indicated, or to project ARAMARK's financial performance for any future period.
The pro forma adjustments do not reflect any synergies or other operating
benefits that may be realized as ARAMARK integrates ServiceMaster Management
Services with its existing operations.
UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF INCOME
FOR THE NINE-MONTHS ENDED JUNE 28, 2002
(in thousands, except per share amounts)
ServiceMaster Pro Forma
Management Adjustments Pro Forma
ARAMARK Services for the for the
Historical Historical (a) Acquisition Acquisition
Sales $ 6,495,808 $ 161,465 $-- $ 6,657,273
Costs and Expenses:
Cost of services provided 5,866,113 125,780 -- 5,991,893
Depreciation and amortization 189,065 3,414 3,213 (b) 195,692
Selling and general corporate expenses 86,294 21,052 -- 107,346
Other income, net (43,695) -- -- (43,695)
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6,097,777 150,246 3,213 6,251,236
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Operating income 398,031 11,219 (3,213) 406,037
Interest and other financing costs, net 103,912 -- 5,586 (c) 109,498
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Income before income taxes 294,119 11,219 (8,799) 296,539
Provision for Income Taxes 105,733 4,432 (3,432)(d) 106,733
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Net income $ 188,386 $ 6,787 $ (5,367) $ 189,806
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Earnings Per Share
Basic $ 0.99 $ 1.00
Diluted $ 0.94 $ 0.95
NOTES TO UNAUDITED PRO FORMA FINANCIAL STATEMENTS
(a) Represents the unaudited historical income statement of the
ServiceMaster Management Services business acquired, for the two months
ended November 30, 2001, including the amounts related to the ServiceMaster
corporate campus which were also acquired.
(b) To reflect additional depreciation and amortization related to the
tangible and intangible assets acquired, based upon the following weighted
average depreciation / amortization periods:
Property and equipment .............................. 30 Years
Tradename ........................................... 3 Years
Contract rights ..................................... 10 Years
In accordance with the recently issued Statement of Financial
Accounting Standard No. 142, goodwill resulting from the acquisition is not
amortized.
(c) To reflect additional interest expense resulting from the
acquisition related borrowings. The interest rate on the bridge financing
is based on LIBOR plus-1 3/8% or 4.2% (including the syndication fee). The
average interest rate on ARAMARK's senior revolving credit facility was
3.1%.
(d) To reflect the income tax effect resulting form the pro forma
adjustments using a statutory tax rate of 39%.
(c) Exhibits were previously filed with this report on December 10,
2001, and are incorporated herein by reference.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
Date: August 20, 2002
ARAMARK CORPORATION
By: /s/ John M. Lafferty
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Name: John M. Lafferty
Title: Senior Vice President,
Controller and Chief
Accounting Officer