12/10 SYSCO and US Foods Agree to Buyout

Food Services of Eastern Wisconsin located in Jackson and US Foods made a major announcement on Monday.  The two companies have made an agreement which will in reality create a world-class foodservice company.  Sysco is buying privately held US Foods for about $3.5 billion in cash and stock.  When the deal closes, Sysco expects the addition of US Foods to boost its annual sales by about 46 percent to around $65 billion.  Sysco shares rose almost 10 percent Monday and hit their highest point in decades.  Houston's Sysco will pay $3 billion in common stock and $500 million in cash.  It will also assume or refinance about $4.7 billion in debt.  That puts the total value of the deal at about $8.2 billion. Sysco President and CEO Bill DeLaney said that the two companies have highly complementary core strengths including large product portfolios.  The buyout has been approved by the boards of both companies.  Sysco said it expects the deal, which is set to close in the third calendar quarter of 2014, to immediately boost its profit after adjusting for acquisition-related costs and expenses.  It's also expected to create annual cost savings of at least $600 million after three or four years.  Sysco and its Jackson location is a well known full line distributor offering over 13,000 products.  Product offering covers not only frozen product but fresh meats, produce, fresh seafood and poultry plus a full line of domestic & imported cheese products, and import specialty dry products.
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Topics : Business_Finance
Location : Eastern WisconsinHouston
People : Bill DeLaney
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