The structure of the transaction requires Sysco to pay approximately $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 also will assume or refinance US Foods’ net debt, which is currently approximately $4.7 billion, bringing the total value of the transaction to $8.2 billion.
After completion of the transaction, the shareholders 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. LP, will join Sysco’s board of directors upon closing.
“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,” said Bill DeLaney, president and CEO of Sysco. “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.”
At closing, the combined companies are expected to have annualized sales of approximately $65 billion and generate operating cash flows of approximately $2 billion, according to Sysco.