(Bloomberg) -- Elis SA, a provider of uniform and linen cleaning services and workplace supplies, said it made a preliminary approach to Vestis Corp. of the US about a potential acquisition.
Elis regularly considers strategic opportunities and there’s no certainty that the discussions will lead to a deal, the French company said in a statement Friday. Financial terms were not disclosed.
Elis’s stock dropped as much as 17% in Paris trading, nearly erasing its gains for the year. Vestis rose 12% on Thursday after Reuters first reported the approach, before giving back some gains on Friday. The Roswell, Georgia-based company has a market valuation of about $1.9 billion.
The move by Elis comes after Vestis lowered its fiscal-year revenue growth and profitability guidance in May, sending its shares to a record 45% plunge in a single day. Elis said any deal would have to meet its commitments to shareholders. Those include maintaining an investment-grade credit rating and making sure the purchase adds to earnings per share in the first year.
(Updates with details from statement in fourth paragraph)
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