Aramark spun off Vestis effective September 30, 2023 in a transaction meant to be tax-free to ARMK shareholders. Vestis began normal trading on October 2, 2023. ARMK shareholders received 1 share of VSTS for each 2 shares of ARMK owned.

This action is a simple spinoff transaction in the accounting software. It is structured to be a non-taxable event for ARMK shareholders. The cost basis allocation information is calculated from the average of the high and low prices of VSTS and ARMK on the October 2, 2023. The spinoff was completed on a weekend so first trading day prices were used. This method to determine fair market value of the post spinoff companies is commonly used. A link to IRS Form 8937 is available from the Aramark web site at https://aramark.gcs-web.com/

NOTE:

The cost basis allocation is dependent on the prices used for both Vestis and Aramark in the cost basis allocation calculations. In our experience brokers tend to use the prices found in the guidance companies post on their websites including IRS form 8937. If available our instructions will use the guidance in form 8937. If your broker does not use that guidance, or form 8937 is not publicly available, the cost basis of the companies involved as recorded in your accounting records and in your broker’s records will not match. This is not cause for concern. This is just due to the inexact nature of the tax code in this regard. Partnership tax returns have specific areas to reconcile these usually small differences. ICLUBcentral tax printer software automatically fills in these adjustments in the normal operation of the software using the data imported from your accounting records and that you enter from your 1099.

The Spinoff Entry

Go to Accounting > Securities > Record spinoff of securities in myICLUB.com. If you are unfamiliar with spinoff transactions you can get help at this URL: https://www.myiclub.com/faq/article.aspx?id=54

Here is the information you need to complete the spinoff.

• Date: 9/30/2023
• Select Parent Security (or Parent Company) : Aramark (ARMK)
• Remaining Basis Percentage: 73.87
• Cash received:  See your broker statement for cash-in-lieu received
• Spinoff  Security (or Symbol of New Company) : Vestis (VSTS)
•  Shares received : 0.5 x (# of ARMK shares owned)   (Include fractional shares.)
  • For example, if you owned 100 ARMK shares, you should receive 0.5 x 100 = 50 VSTS shares.
• Price Per Share : 17.66   (Average of high and low VSTS prices on 10/2/2023)                           

Save the transaction and the spinoff has been entered.