Founding family fends off shakeup at UniFirst

While one family feud over the future of a multibillion-dollar local company played out in Delaware last week, another one came to an end in Massachusetts.

In the Delaware Chancery Court, all eyes were on a trial that involved recently deposed Market Basket chief executive Arthur T. Demoulas, and his fight with the supermarket chain’s board and his sisters to get his job back. The Demoulas family was left hanging once the trial wrapped up: A decision from the Chancery Court judge isn’t expected until sometime next year.

Back in Massachusetts, however, there was a more definitive ending for the Croatti family and UniFirst, the Wilmington-based uniform supplier that’s publicly traded but controlled by family members. A hostile campaign by New York hedge fund Engine Capital to put its founder as well as a son of beloved former CEO Ron Croatti on UniFirst’s board fell short of the votes it needed.

That’s not to say shareholders didn’t like the idea. Most did, judging from the fact that Engine Capital founder Arnaud Ajdler and Michael Croatti received more common-stock votes. But the slate of two incumbent board members, chief executive Steven Sintros and Joseph Nowicki, prevailed. That’s because key Croatti family members, including Michael’s mother Carol Croatti and brother Matthew Croatti, own preferred shares that carry much more weight in the voting, and they supported the Sintros-Nowicki ticket.

Michael Croatti rose through the ranks of the uniform company over three decades working under his father, who died in 2017. But in 2024, the son’s role changed from executive vice president to consultant, while Kelly Rooney was brought on board to be chief operating officer.

Then, in January of this year, larger rival Cintas made an unsolicited bid for UniFirst. That bid was ultimately rejected, and the UniFirst stock tumbled. Ajdler and his firm then showed up, buying shares, and eventually allying with Michael Croatti with an effort to get on the board and potentially put the company on the market.

Ajdler knew it would be tough, because certain Croatti family members control 70 percent of the voting rights. He appealed to them to change their minds, saying the company has struggled since Ron Croatti’s death and even more so since Michael Croatti’s departure from the executive ranks. But it was not meant to be.

After the vote, the board issued a brief statement portraying the proxy fight in positive terms, saying it appreciated the “active dialogue” with UniFirst shareholders, and that it looks forward to “further constructive engagement.”

Ajdler was less diplomatic in his statement, saying the shareholder vote “represents an unequivocal rebuke” of UniFirst’s “value-destructive standalone strategy” and sends a message that the board should put the company on the market and meet with potential buyers — and, at the very least, eliminate the shares’ dual-class structure. He said UniFirst is struggling and needs to team up with a competitor to flourish again. “Selling the Company,” Ajdler concluded, “is the best path to achieving Ron’s goals and honoring his legacy.”

Then on Monday, Cintas announced that it has submitted another bid for UniFirst for just over $5 billion, the same price that it offered nearly a year ago.

Maybe the saga isn’t over after all.

This is an installment of our weekly Bold Types column about the movers and shakers on Boston’s business scene.

Jon Chesto can be reached at jon.chesto@globe.com. Follow him @jonchesto.