Foodservice: Sysco to acquire US Foods

Houston / TX. (syy) Sysco Corporation and US Foods announced an agreement to merge, creating a world-class foodservice company. The total enterprise value of the transaction is approximately 8,2 billion USD and the combination has been approved by the Board of Directors of each company.

Bill DeLaney, Sysco president and chief executive officer, will lead the combined company, which will continue to be named Sysco and headquartered in Houston, Texas. At closing, Sysco will have estimated annual sales of approximately 65 billion USD.

Sysco will pay approximately 3,5 billion USD for the equity of US Foods, comprising three billion USD of Sysco common stock and 500 million USD of cash. As part of the transaction, Sysco will also assume or refinance US Foods´ net debt, which is currently approximately 4,7 billion USD, bringing the total enterprise value to 8,2 billion USD. Sysco has secured fully committed bridge financing and expects to issue permanent financing prior to closing.

After completion of the transaction, the equity holders of US Foods will own approximately 87 million shares, or roughly 13 percent of Sysco. A representative of each of US Foods´ majority shareholders, affiliates of Clayton, Dubilier + Rice LLC and Kohlberg Kravis Roberts + Co. L.P., will join Sysco´s Board of Directors upon closing.

Bill DeLaney, Sysco president and chief executive officer, said, «As we continue on our transformational journey at Sysco, this transaction will position us to significantly accelerate our progress in achieving the vision we have for our company: to be our customers´ most valued and trusted business partner. Sysco and US Foods have highly complementary core strengths including a broad product portfolio and passionate food people deeply committed to customer service, quality-assured products and safety. In particular we look forward to welcoming US Foods´ talented employees and continuing to invest in the development of all of our people. Together we will strive to enhance shareholder value by providing our customers with highly differentiated products and services».

John Lederer, president and chief executive officer of US Foods: «Combining and maximizing the significant strengths of two outstanding companies is certain to be of tremendous advantage in supporting our customers as they tackle the challenges of today´s demanding environment».

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