11/25/2025
UniFirst Activist Investor Pushes for Sale amid Family Rift, Rejected $5.3B Cintas Offer
Boston Business Journal (11/25/25) Aloe, Jess
An activist investor in uniform supply company UniFirst Corp. (UNF) is pushing for a sale — and wading into family discord. Arnaud Ajdler, managing member of Engine Capital Management LP, released a public letter Tuesday urging members of the Croatti family, the trustees of the publicly traded company and the descendants of founder Aldo Croatti, to meet with representatives of the New York City hedge fund. Engine Capital is one of the largest independent shareholders in Wilmington-based Unifirst, with a 2.2% stake in the company. Engine Capital is backing a slate of three director candidates for the company's annual meeting in December. In addition to Ajdler, they include Michael Croatti, the grandson of Ardo Croatti and son of former CEO Ronald Croatti. The three new directors would increase the size of the board from seven to eight. Engine Capital contends that ever since the death of Ronald Croatti in 2017, UniFirst has stagnated, and attributed the decline to a succession shakeup. "In a surprising departure from Mr. Ronald Croatti’s expressed succession plans, his son Michael A. Croatti was not appointed CEO despite his 28 years at the company; instead, the former CFO, Steven Sintros, was elevated to president and CEO, and Cynthia Croatti later assumed the role of special consultant and adviser to the CEO and senior leadership," Engine Capital wrote in a letter to shareholders earlier this month. "We believe these decisions marked the beginning of UniFirst’s decline." In this week's letter urging a sale, Ajdler reiterated his criticisms. He blamed four current trustees — Carol Croatti, Matthew Croatti, Cynthia Croatti and Cecelia Levenstein — for leading UniFirst into a "period of stagnation and decline that we think many will view as having destroyed Aldo and Ron's legacies and tarnished the Croatti family name." Aldo Croatti founded UniFirst in 1936 to provide laundry services to Boston factory workers. Today, UniFirst has a $3 billion market capitalization, roughly 16,000 employees and reported $2.43 billion in revenue for fiscal 2025 on its recent fourth-quarter earnings call. On that call, Sintros told investors that "this level of top-line growth does not yet reflect our long-term ambitions," but that the company is "confident" it will establish "a strong foundation for elevated performance in the years to come." Early in 2025, UniFirst rejected an all-cash buyout offer from rival Cintas valued at roughly $5.3 billion. The Ohio-based Cintas made the initial offer in November 2024 — right around when Michael Croatti stepped down from his executive role with UniFirst after working at the company for 35 years. Michael Croatti owns about 0.4% of UniFirst shares and 1.6% of the company's Class B shares, according to a regulatory filing. On a Jan 2025 earnings call, the day after Cintas made its offer public, Sintros said that "the UniFirst Board in consultation with its independent financial and legal advisers, carefully evaluated the unsolicited nonbinding proposal from Cintas and unanimously determined that it was not in the best interest of UniFirst, our shareholders and our other stakeholders." He added that the board "considered the offer price execution and business risk, feedback from some of the company's largest shareholders by voting power and the company's future growth and value creation opportunities." When an analyst pointed out that the offer represented a substantial premium and asked if there was "more than just the financials being considered," Sintros reiterated the same statement. But Ajdler's letter cites "significant divisions within the family" regarding the rejection of the Cintas bid, saying it would have made the Croatti family "hundreds of millions of dollars wealthier today." There is no realistic path to achieving the valuation a strategic buyer could pay, Ajdler argues. "Despite what management may claim, pursuing the current standalone plan is likely to result in further underperformance, market share losses, employee departures, workforce layoffs, declining morale, and continued value destruction," he wrote. A transaction would also end the "internal divisions and infighting that have taken root within the family," Ajdler said. Ajdler founded Engine Capital in 2013. The "special situation" fund invests in "companies undergoing change," and has a busy history of activist investing. This past spring, it pushed for rideshare company Lyft to explore strategic alternatives via a proxy fight, though it dropped its campaign after Lyft raised its stock buyback program. It's currently waging activist fights at a diverse group of companies, including mental health company Acadia Healthcare; oil and gas company Parkland Corp.; and Pennsylvania firm Avantor, which provides tools to the life science industry. Not all of its pushes have been successful. Engine Capital took control of Canadian legal tech firm Dye & Durham a year ago, and now, co-founder Ronnie Wahi is waging his own activist campaign to wrest control back. He accuses the company under Engine Capital's leadership of pursuing a "reckless strategy which has caused a severe deterioration of revenue while ramping up spending," according to an October press release. In this week's letter, Ajdler called UniFirst's decision to schedule a virtual annual meeting for next month shameful. According to Ajdler, the only time UniFirst has held its annual meeting virtually was in early 2021, due to the pandemic. Additionally, he said that UniFirst had "brazenly" pushed the date forward to Dec. 15, when the meeting was usually held in January. The letter also says the trustees named have shown "extreme disregard" for shareholders by refusing to meet with Engine Capital. In its own proxy recommendation, urging shareholders to vote for its own director nominees, UniFirst said it had "engaged periodically in constructive dialogue with Engine Capital with respect to various questions relating to the Company's business and other related topics" between November 2023 and October 2025. UniFirst said it had met with Ajdler earlier this month to better understand Engine Capital's perspectives and proposals and evaluate Ajdler as a proposed nominee before recommending shareholders decline to vote for Ajdler and Michael Croatti. UniFirst's stock price had risen about 3% by midafternoon Tuesday following the release of Ajdler's letter. That share price, $167.84, is slightly lower than its $169.33 closing price on Jan. 6, 2025, the day before Cintas made its acquisition offer public.
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