While reporting its second-quarter financial results today, UniFirst Corp. (UNF) said it repurchased 1.105 million shares of Class B common stock and 0.073 million shares of common stock for a combined $146.0 million in a private transaction with the Croatti family at a per share price of $124.00.
In addition, UniFirst said it will raise its quarterly dividend to $0.1125 per share for common Stock and to $0.09 per share for Class B common stock, up from $0.0375 and $0.03 per share, respectively.
The company noted that both of these decisions were reviewed and approved as part of the Board of Directors' ongoing evaluation of UniFirst's capital allocation strategy.
Steve Sintros, UniFirst President and Chief Executive Officer said, "The board determined that these actions would be beneficial to UniFirst and would not limit our ability to continue making the necessary investments that will allow us to grow and better service our customers which continue to be our top priorities. These actions also reflect the ongoing evaluation of opportunities that will provide value to our shareholders."
According to UniFirst, the opportunity to repurchase shares from the Croatti family was evaluated by an independent special committee of the Board of Directors.
The sale of shares by the Croatti family was executed to provide liquidity as well as for estate and family financial planning following the passing of former UniFirst Chief Executive Officer, Ronald Croatti.
The Special Committee determined that a repurchase of Croatti family Class B common stock at a discount to market was in the best interests of the company as it is accretive to earnings per share and addresses uncertainties that may have been created if the Croatti family had pursued other liquidity options.
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