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Sysco Corp and US Foods Merge In an $8.2 Billion Deal

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Published on : Dec 10, 2013

Sysco Corp, a company that is engaged in marketing and distribution of food products to enterprises such as medical and educational facilities, restaurants, and other hospitality centers, has announced the purchase of Illinois-based food distribution company US Foods. The deal is pegged at USD 8.2 billion. Sysco Corp is Houston area’s fourth-largest public company.

According to statements by sources on Monday, the deal entails a USD 3 billion cash and stock buyout. It will also see Sysco refinancing or assuming a net debt of US Foods that currently stands at an estimated USD 4.7 billion.

On completion of the transaction, Sysco’s current President and CEO Bill DeLaney will preside in the same capacity for the combined business entity. The new company will retain the Sysco brand name as well as its headquarters in Houston, Texas. According to sources close to the deal, a final closure is expected around March 2014. Projected annual sales of the company are currently estimated at USD 65 billion and the operating cash flow is approximated at USD 2 billion.

US Foods is a privately-held company that has about 25,000 employees and operations spanning 60 centers across the U.S, with USD 22 billion revenue.

In 2013, Sysco was in the news for touching a record sales figure of $44 billion in the fiscal year ending June 29. The company has close to 48,000 worldwide employees as per figures stated in a research by Houston Business Journal.

In order to provide more information about the deal to investors, consumers, and stakeholders, the two foodservice companies have created a website detailing vital facts about the merger.

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