U.S. food distributor Performance Food Group (PFG) is acquiring Southeast U.S. distributor Cheney Bros. for USD 2.1 billion (EUR 1.9 billion) in cash.
Cheney Bros., based in Riviera Beach, Florida, U.S.A., is an independent broadline foodservice distributor that generates approximately USD 3.2 billion (EUR 2.9 billion) in annual revenue, PFG said. With global distribution and over 1.5 million square feet of distribution space, it owns exclusive brands including Crazy Fish International, Grand Western Steaks, and Acento Latino.
The acquisition creates a stronger presence in the U.S. Southeast region for Richmond, Virginia, U.S.A.-based PFG and adds an additional five state-of-the-art broadline distribution facilities with excess capacity for further growth across four Southeastern states.
"This acquisition will expand and enhance our offerings to a high-quality and diverse customer base. We have long admired the success of Cheney Bros. in the Southeastern U.S. and believe that the combination of our organizations will push the business to new heights," PFG Chairman and CEO George Holm said.
PFG expects to achieve around USD 50 million (EUR 45 million) of annual run-rate synergies in procurement, operations, and logistics by the third full fiscal year following closing. Cheney Bros. provides products to a diverse range of customers including independent restaurants, restaurant chains, hotels, country clubs, institutional groups, and other foodservice operators.
Cheney Brothers has a high mix of sales to independent restaurants but a low mix of private brand penetration to independent restaurants, so PFG has a “meaningful opportunity to expand the sale of private brands to Cheney Brothers' independent restaurant customers by leveraging PFG’s broad portfolio of private brands,” the company said.
“I have watched PFG grow into one of the country’s largest foodservice distributors by fostering new business relationships and maintaining a strong company culture. I believe this transaction will bring together two winning organizations and create a significant platform for growth,” Cheney Brothers CEO Byron Russel said.
The USD 2.1 billion purchase price is expected to be financed with borrowing on PFG’s asset-based lending facility and new senior unsecured notes. J.P. Morgan acted as the financial advisor to PFG.
