At a Glance
Leading producer and distributor of uniforms, food services and facilities management throughout the world
Stiff competition for other food service agencies and discount retailers offering uniforms and other services offered by Aramark
Aramark is a leader in professional services offering food services, facilities management and apparel to among others healthcare, educational and sports institutions and to businesses around the world.
About Aramark Services, Inc.
Keeping employees fed and clothed is a mark of this company. ARAMARK is one of the leading contract foodservice providers in the world and a high-ranking uniform supplier in the US. The company offers corporate dining services and operates concessions at sports arenas and other entertainment venues, while its ARAMARK Refreshment Services unit is a leading provider of vending and beverage services. The firm also provides facilities management services. Through ARAMARK Uniform and Career Apparel, the company supplies uniforms for healthcare, public safety, and technology workers. US customers generate about three-quarters of the company's revenue.
ARAMARK operates in three segments: Food and Support Services (FSS) US, FSS International, and Uniform and Career Apparel.
FSS US, which supplies nearly two-thirds of sales, provides food, refreshment, specialized dietary, and support services, including facility maintenance and housekeeping in the US.
FSS International, about a quarter of sales, provides food and facility services to customers outside the US.
The Uniform and Career Apparel segment, about 15% of sales, offers personalized uniforms and accessories, work clothing, outerwear, and particulate-free garments, as well as mats, shop towels, and first aid supplies.
The company relies on one food distributor, Sysco Corp., to deliver about half of its food and non-food products in the US and Canada.
ARAMARK has operations throughout the US and nearly 20 other countries. International markets such as Canada, Chile, Germany, Ireland, and the UK, account for about 25% of the company's revenue. It also has operations in Japan through its 50% ownership of AIM Services Co.
The company has a diverse customer base in North America, serving customers in about 45 states, Puerto Rico, Mexico, and Canada from about 390 service facilities and distribution centers.
Sales and Marketing
ARAMARK serves businesses of all sizes in many industries. Like its outsourcing rivals, ARAMARK competes primarily through bids to provide services to specific clients. It is generally engaged through long-term contracts that are renewed periodically. Most of ARAMARK's contracts allow the company to retain all revenue from its operations while paying a commission to the client; it also works under management-fee arrangements under which clients bear some of the risk for expenses. In addition, the company's uniform and apparel division also sells products (outerwear, safety gear, work wear) directly to customers.
Three years of increasing sales pushed ARAMARK's top line past its previous revenue high of $14.8 billion reached in 2014, while its net income steadily rose over those five years.
In 2018 (ended September), ARAMARK served up an 8% sales increase to $15.8 billion from 2017 with higher sales in all segments. Organic sales accounted for half the increase, and acquisitions and favorable currency exchange rates provided the other half. The uniform business, boosted by the AmeriPride acquisition, grew 28%, accounting for 36% of the overall increase.
ARAMARK's net income jumped about 50% to about $568 million in 2018 from 2017 as costs were stable as a percentage of sales from year-to-year.
The company had about $215 million in cash and equivalents on hand in 2018 compared to $238 million the year before. In 2018, the company's operations generated $1 billion in cash, investing activities used $2.8 billion, and financing activities provided $1.8 billion.
The company has a heavy debt load of $7.2 billion, which could limit its flexibility in funding acquisitions or other expenditures and lead to higher interest rates for new financing.
ARAMARK is working on its menu and technology tools to drive growth. The company has partnered with the American Heart Association to develop menus that improve the nutrition offered to customers. Through the partnership, called the Healthy by Life 20 by 20 campaign, ARAMARK has reduced calories, saturated fats, and sodium across its menus and increased the presence of grains, fruits, and vegetables.
ARAMARK has installed technology tools, including those that allow for self-ordering, to provide a better customer experience and improve productivity.
Acquisitions continue to be a key part of ARAMARK's strategy. The $1 billion deal for AmeriPride Services Inc. expanded the company's uniform business in the US and established a strong position in Canada.
ARAMARK has been trying to consolidate its operations to become more efficient. The company sold its healthcare technologies business for $300 million in 2019, planning to use the proceeds to pay down debt.
Mergers and Acquisitions
In 2018 ARARK acquired AmeriPride Services Inc., a uniform and linen rental and supply company in the US and Canada, for about $1 billion. Besides expanding the uniform business in the US, AmeriPride's operations put ARMARK's Canadian business on a stronger foundation.
The 2017 acquisition of Avendra, a hospitality procurement services provider in North America, bolstered ARAMARK's purchasing power and supply chain management capabilities. ARAMARK paid about $1.35 billion for Avendra.
During fiscal 2016 ARAMARK purchased Avoca Handweavers Limited, an Irish retail and cafe business, for approximately $65.8 million.
ARAMARK was founded in 1959 and gone through several transitions over the years. In 1984, management and employees teamed up with investors to buy the company and 17 years later made an IPO. ARAMARK went private again in 2007, bought out by investors that included Goldman Sachs Capital Partners and CCMP Capital Advisors, as well as some 250 senior managers. In 2013, ARAMARK returned to the public markets with an IPO.
2400 MARKET ST
Philadelphia, PA 19103-3031
Phone: 1 (215) 238-3000
Employer Type: Privately Owned
Employees (This Location): 200
Employees (All Locations): 259,000