Foodservice Equipment Reports

Sysco To Buy US Foods For $3.5 Billion

Two of the largest broadline distributors in the country will be joining forces. On Dec. 9, Sysco agreed to buy rival US Foods for about $3.5 billion in stock and cash.

Under the terms of the agreement announced Monday, Houston-based Sysco will pay $3 billion in common stock and $500 million in cash. It also will assume or refinance about $4.7 billion in debt, putting the total value of the deal at about $8.2 billion. When the acquisition closes, Sysco expects its annual revenues to grow by 46%, to approximately $65 billion.

Bill DeLaney, Sysco president and CEO, will lead the combined company, which will continue to be named Sysco and remain headquartered in Houston. The buyout has been approved by the boards of both companies. US Foods’ majority shareholders, affiliates of Clayton, Dubilier & Rice and Kohlberg Kravis Roberts & Co., will join Sysco’s board.

Clayton Dubilier and K.K.R. bought US Foods from the Dutch grocery-store company Royal Ahold in 2007 for about $7.1 billion, which included debt.

Sysco operates 193 distribution facilities serving approximately 425,000 customers around the world. Rosemont, Ill.-based US Foods has approximately $22 billion in annual revenue and more than 60 locations nationwide. It carries more than 13,000 E&S products in its Culinary Equipment & Supplies division.

The transaction is expected to close by the third quarter of 2014, pending antitrust approval.

Related Articles

US Foods To Buy SGA Food Group For $1.8 Billion

FTC Blocks Sysco/US Foods Merger

Sysco Gears For Court Fight To Override FTC’s Block Of US Foods Merger

Related Events

10 Apr

Food & Hotel Indonesia 2019

Kemayoran, Jakarta

24 Apr

Food & Hotel Vietnam 2017

Ho Chi Minh City

05 Oct

Anuga

Cologne