Earlier this week, Performance Food Group (PFG) Co. announced it had entered into a definitive agreement to acquire competitor Reinhart Foodservice LLC from Reyes Holdings LLC. The transaction is valued at $2 billion. The acquisition will create a company with $30 billion in net sales, according to PFG.
The move brings together two of the largest foodservice distributors in the U.S. at a time when scale is more important than ever. The trucking shortage has recently put increased pressure on a fragmented industry with low profit margins.
“We are excited to announce the strategic acquisition of Reinhart and welcome them to Performance Food Group,” said George Holm, PFG chairman, president and CEO, in a news release. “I’ve known the Reyes family for nearly two decades, and they have built and grown an incredible company. 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.
“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," Holm continued.
The acquisition gives PFG greater exposure to the Midwest, where Reinhart has a distribution center. Reinhart’s clients include independent restaurants and healthcare and education facilities, which it serves from its 26 distribution centers. PFG currently has 86 distribution centers and serves over 150,000 locations including schools, businesses and healthcare facilities, as well as restaurant brands like Subway and Burger King.
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