XML 28 R12.htm IDEA: XBRL DOCUMENT
v3.24.3

Acquisitions | 12 Months Ended
--- | ---
Aug. 31, 2024
Business Combinations [Abstract] |
Acquisitions | 2. Acquisitions Whenever the Company acquires a business, consistent with current accounting guidance, the results of operations of the acquisition are included in the Company’s consolidated financial results from the date of the acquisition. The amount assigned to intangible assets acquired is based on their respective fair values determined as of the acquisition date. The excess of the purchase price over the tangible and intangible assets is recorded as goodwill. Goodwill is allocated to the segment to which the acquisition relates and is deductible for tax purposes. During fiscal 2024, the Company did not complete any material business acquisitions. Clean Uniform During the third quarter of fiscal 2023, the Company completed the acquisition of the business and certain real estate assets of Clean Uniform (“Clean”) from Clean Holdco, Inc. and certain of its affiliates for an aggregate purchase price of $299.1 million, net of cash acquired. The difference between the cash paid and the total purchase price of $302.4 million represented amounts owed from the seller as a result of final closing adjustments. The acquisition was structured primarily as a stock purchase but was treated as an asset purchase from a tax perspective, which has allowed for a step-up in the tax basis of the assets and provides incremental tax benefits expected to be realized over time with a value of approximately $40 million. Clean was a uniform, workwear and facility service program provider with 11 locations covering Missouri, Illinois, Arkansas, Kansas and Oklahoma. Prior to the closing of the acquisition, neither the Company nor any of its affiliates, or any director or officer of the Company or any of its affiliates, or any associate of any such director or officer, had any material relationship with any of the sellers. The results of operations from Clean are included in the Company’s results under the U.S. and Canadian Rental and Cleaning segment subsequent to the acquisition date of March 13, 2023. The Company paid for the acquisition of Clean with cash on hand and borrowings under the Credit Agreement (defined below). The Clean acquisition was accounted for using the purchase method of accounting. The Company has measured the fair value of its tangible and intangible assets acquired and liabilities assumed in the Clean acquisition and has finalized the purchase price allocations. The amounts assigned to intangible assets acquired were based on their respective fair values determined as of the acquisition date, which the Company determined by engaging specialists to assist in their valuation. The table below summarizes the final purchase price allocation to the estimated fair value of assets acquired and liabilities assumed at the acquisition date. Goodwill is calculated as the excess of the purchase price over the net assets recognized and represents the estimated future economic benefits arising from expected synergies and growth opportunities for the Company. All of the goodwill and intangible assets were allocated to the U.S. and Canadian Rental and Cleaning segment and are deductible for tax purposes. Transaction and related costs, consisting primarily of professional fees, directly related to the acquisition, totaled approximately $3.0 million during fiscal 2023. All transaction and related costs were expensed as incurred and are included in selling and administrative expenses. The final purchase price allocation is as follows (in thousands):
Receivables |  | $ | 8,301 |
Inventories |  |  | 632 |
Rental merchandise in service |  |  | 8,535 |
Prepaid expenses and other current assets |  |  | 762 |
Property, plant and equipment |  |  | 31,497 |
Operating lease right-of-use assets, net |  |  | 3,517 |
Goodwill and intangible assets |  |  | 257,833 |
Accounts payable |  |  | (2,011 | )
Accrued liabilities |  |  | (5,767 | )
Operating lease liabilities, current |  |  | (1,510 | )
Operating lease liabilities, non-current |  |  | (2,657 | )
Total purchase price |  | $ | 299,132 |
The following table identifies the Company’s allocation of purchase price to the intangible assets and goodwill acquired by category:
Year ended |  | Estimated Fair Value (in thousands) |  |  | Weighted Average Life (in years) |
Goodwill |  | $ | 187,733 |  |  | N/A |
Customer contracts |  |  | 64,800 |  |  |  | 15.0 |
Trade name |  |  | 5,300 |  |  |  | 3.0 |
Total intangible assets and goodwill acquired |  | $ | 257,833 |  |  |  |
The amount of amortization expense recognized of Clean customer contracts and trade name included in the consolidated statements of income from the acquisition date of March 13, 2023 to August 26, 2023 was $3.8 million and $0.9 million, respectively. Unaudited pro-forma information presents the combined financial resul ts for the Company and Clean as if the acquisition of Clean had occurred on August 28, 2022. The unaudited pro-forma revenue of the combined entity for fiscal 2023 was $2.3 billion reflecting the effects of the Clean acquisition. The effects of the Clean acquisition on unaudited pro-forma net income of the combined entity were not material for fiscal 2023. Other Acquisitions During fiscal 2023, the Company completed four other business acquisitions with an aggregate purchase price of approximately $7.1 million. Tangible assets acquired primarily relate to accounts receivable, inventory and property, plant and equipment. The results of operations of all acquisitions completed during fiscal 2023 have been included in the Company’s consolidated financial results since their respective acquisition dates. These acquisitions were not significant in relation to the Company’s consolidated financial results and, therefore, pro-forma financial information has not been presented. The following table identifies the Company’s allocation of purchase price to the intangible assets and goodwill acquired by category:
Year ended |  | Estimated Fair Value (in thousands) |  |  | Weighted Average Life (in years) |
Goodwill |  | $ | 3,944 |  |  | N/A |
Customer contracts |  |  | 2,271 |  |  |  | 14.0 |
Other intangible assets |  |  | 25 |  |  |  | 5.0 |
Total intangible assets and goodwill acquired |  | $ | 6,240 |  |  |  |

X
- Definition The entire disclosure for a business combination (or series of individually immaterial business combinations) completed during the period, including background, timing, and recognized assets and liabilities. The disclosure may include leverage buyout transactions (as applicable). + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Topic 805 -SubTopic 20 -Name Accounting Standards Codification -Section 50 -Paragraph 5 -Subparagraph (b) -Publisher FASB -URI https://asc.fasb.org//1943274/2147479907/805-20-50-5 Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef -Topic 805 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org//805/tableOfContent + Details
Name: | us-gaap_BusinessCombinationDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | dtr-types:textBlockItemType
Balance Type: | na
Period Type: | duration

X
- References No definition available. + Details
Name: | us-gaap_BusinessCombinationsAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration