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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): June 2, 1997
G&K SERVICES, INC.
(Exact name of registrant as specified in its charter)
MINNESOTA
(State or other jurisdiction of incorporation)
0-4063 41-0449530
(Commission File Number) (IRS Employer Identification No.)
5995 OPUS PARKWAY SUITE 500, MINNETONKA, MN 55343
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (612) 912-5748
NOT APPLICABLE
(Former name or former address, if changed since last report)
Page 1 of 4
Exhibit Index Appears on Page 3
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ITEM 5. OTHER EVENTS.
The Registrant's Press Release dated June 2, 1997, which is filed as
Exhibit 99.1 to this Form 8-K, is incorporated herein by reference.
ITEM 7. FINANCIAL STATEMENT, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS.
(c) Exhibits
99.1 Press Release dated June 2, 1997.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
G&K SERVICES, INC.
(Registrant)
Date: June 2, 1997 By: /s/ Timothy W. Kuck
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Name: Timothy W. Kuck
Title: Chief Financial Officer
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EXHIBIT INDEX
EXHIBIT NO. DESCRIPTION PAGE
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99.1 Press Release . . . . . . . . . . . . . . . . . . . . . . 4
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G&K SERVICES TO ACQUIRE UNIFORM RENTAL ASSETS
OF NATIONAL LINEN SERVICE
G&K Services, Inc. (NASDAQ:GKSRA) today announced that it has signed an
agreement to purchase the uniform rental assets, plus selected linen rental
assets, of National Linen Service (NLS), a division of National Service
Industries, Inc. The acquisition will greatly strengthen G&K's position in the
Southeastern United States and make it the third largest supplier in the uniform
leasing industry, with anticipated revenues in excess of $500 million in the
fiscal year beginning July 1, 1997.
Under the agreement, G&K will acquire 29 NLS processing facilities. The
facilities include 20 uniform rental plants, five linen rental plants and four
mixed uniform and linen rental plants. All but five of the plants are located
in the Southeastern United States. The 20 uniform rental facilities have
annualized revenues of approximately $125 million; the nine other plants have
annualized revenues of approximately $80 million. G&K already operates 32
plants in the United States and Canada with reported revenues of $341 million
during the most recent four quarters.
The cash purchase price will be approximately $287 million, subject to
adjustment after a post-closing audit.
The transaction has been approved by the Boards of Directors of both
companies, and is subject to the satisfaction of various closing conditions,
including approval under the Hart-Scott-Rodino Act. The closing is expected to
occur within six weeks. G&K has obtained bank commitments to facilitate the
financing of the acquisition and the refinancing of its existing bank and other
indebtedness.
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"This acquisition presents a tremendous opportunity for G&K," said Richard
Fink, Chairman of G&K Services. "Added to our existing business in the
Southeast, it will give us a leading market presence in this rapidly growing
region. G&K will also become the third largest player in the North American
uniform rental industry. We will be able to leverage our corporate programs
over a much broader revenue base, and be a more credible competitor for large
regional and national uniform accounts. In addition, the increased revenues
will allow us to scale back our planned investments in startup ventures over the
next several years."
"We see great potential to improve the performance of the acquired uniform
plants over the next few years by introducing our strong operating and marketing
systems. Although G&K's historical focus has been on uniform leasing, we will
carefully evaluate the strategic potential of each acquired linen facility to
determine whether it should be retained as a G&K operation," added Fink. "The
period after closing should be very exciting, as we move forward to make the new
business a part of G&K."
Statements in this press release which are not strictly historical are
"forward-looking" statements that are made pursuant to the safe harbor
provisions of the Private Securities Litigation Reform Act of 1995. Forward-
looking statements involve known and unknown risks, which may cause the
company's actual results in the future to differ materially from expected
results. Expectations related to the acquisition of the NLS facilities are, of
course, contingent upon the closing of the transaction; the successful
integration of the NLS operations; the company's ability to retain the NLS
customer base; unforeseen operating risks; the availability of capital to
finance planned growth; competition within the uniform leasing industry; and the
effects of economic conditions.
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G&K Services is one of North America's largest suppliers of corporate work
uniform programs. The company provides services in the United States and Canada
from over 90 processing plants and service centers.
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