Performance Food Group announces USD 2 billion acquisition of Reinhart Foodservice
Performance Food Group has announced its acquisition of Reinhart Foodservice, forming one of the largest foodservice distributors in the United States.
The combined group will have an estimated USD 30 billion (EUR 26.6 billion) in annual sales, behind Sysco’s USD 58.7 billion (EUR 52 billion) in sales in 2018 but ahead of US Foods’ USD 24.1 billion (EUR 21.4 billion).
The price tag for the purchase will be USD 2 billion (EUR 1.8 billion), or approximately USD 1.7 billion (EUR 1.5 billion) after USD 265 million (EUR 235 million) worth of tax incentives kick in.
“We believe the addition of Reinhart and its complementary strengths will expand Performance Foodservice’s broadline presence, improve our network efficiency and help us achieve our long-term growth goals,” Performance Food Group Chairman, President and CEO George Holm said in a press release. “This transaction provides us with greater overall scale, a diverse customer base, including a solid base of independent customers, and builds upon our strong distribution platform. We believe these attributes along with attractive financial characteristics will enhance our ability to continue to deliver the service our customers need to succeed and create shareholder value."
Performance Food Group (PFG), based in Richmond, Virginia, U.S.A, has more than 5,000 suppliers and delivers food products to more than 150,000 locations across the country. Reinhart Foodservice, a privately-held company headquartered in Rosemont, Illinois, U.S.A., operates 26 distribution centers across the U.S. serving 42,500 customers with approximately 90,000 SKUs. It has net sales in excess of USD 6 billion (EUR 5.3 billion) in 2018.
PFG cited “compelling strategic and financial benefits” as the reason for the acquisition, saying that the takeover of Reinhart expands its geographic reach and overall scale.
“The addition of Reinhart’s distribution footprint in key geographies enhances PFG’s existing distribution platform and market density,” it said.
In addition, PFG said Rosemont, Illinois-based Reinhart had an “attractive customer base and product offerings,” and that the acquisition provided “significant synergy opportunities” expected to result in around USD 50 million (EUR 44.3 million) in annual cost savings – primarily in procurement, logistics, and operations – in the third year following the deal’s close.
“We are excited to partner with PFG and believe this acquisition provides meaningful benefits to our customers and expanded opportunities for our employees,” said J. Christopher Reyes, the co-chairman of Reyes Holdings, who owns and operates Reinhart Foodservice. “PFG has a solid track record of growth and leadership in our industry. We believe our strengths and the strong cultural connection our companies share will support continued success for many years to come.”
The acquisition has already been approved by the PFG Board of Directors and Reinhart’s governing body, but is subject to U.S. federal antitrust clearance. If approved, the transaction is expected to close by the end of the calendar year.