Published Dec. 9, 2013
Sysco Corp. and US Foods have agreed to merge, the companies announced today. The transaction value is approximately $8.2 billion and the deal has been approved by the two companies’ board of directors.
Both Sysco and US Foods operate distribution centers in the Columbia area. US Foods opened its first Chefs Store in South Carolina in June on St. Andrews Road in Columbia. The 37,000-square-foot facility is a wholesale, cash-and-carry food and restaurant supply outlet.
Bill DeLaney, Sysco president and CEO, will lead the combined company, which will continue to be named Sysco and be headquartered in Houston. At closing, Sysco will have estimated annual sales of approximately $65 billion.
Sysco will pay $3.5 billion for the equity of US Foods, comprising $3 billion of Sysco common stock and $500 million of cash. As part of the transaction, Sysco will also assume or refinance US Foods’ net debt, which is currently approximately $4.7 billion, bringing the total enterprise value to $8.2 billion. 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% 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 the closing.