In its first post-Labor Day highlight, Clayton Dubilier & Rice has entered into a blockbuster agreement with publicly traded Royal Ahold, an international food retail and foodservice company, to sell its interest in Alliant Exchange Inc., a U.S. food distributor, for $2.2 billion.
Clayton, Dubilier & Rice Fund IV originally purchased Alliant Exchange, the former Kraft foodservice division, from Philip Morris Corp. for $690 million in 1995. “The management team, assisted by Clayton Dubilier, successfully pursued a number of operational initiatives to position the company for long-term growth and improved profitability,” said James Rogers, a principal at Clayton Dubilier.
Deerfield, Ill.-based Alliant Exchange is the third largest U.S. food distributor behind Sysco Corp. and Royal Ahold division U.S. Foodservice. The company had sales of $6.6 billion last year. Royal Ahold operates or services 8,600 stores in The Netherlands, the U.S., Southern and Central Europe, Latin America and Southeast Asia. It had total sales of $30.37 billion, and its share price recently traded at $30.28 per share.
“We believe the prospects for Alliant’s continued success are excellent and that the company’s employees, customers and other key constituencies will benefit from Ahold’s scale and international expertise in the foodservice sector,” said Donald Gogel, chief executive officer at Clayton Dubilier, in a statement.
Ahold, which already owns the foodservice units of U.S. Foodservice, said that it would be able to serve approximately 95% of the U.S. population with its acquisition of Alliant. In addition, Ahold recently purchased Bruno’s Supermarkets, a food retailer with 184 stores in the Southeastern U.S., for $500 million. Bruno’s Supermarkets operates in Alabama, Florida, Mississippi, and Georgia. Ahold also has five retail operating companies including Stop & Shop, Giant-Landover, Giant Carlisle, Tops and BI-LO.