Sysco to pay about $3.5 bln
Company will assume $4.7 bln of debt
CDR, KKR to own 13 pct of Sysco after deal
Shareholders of US Foods, owned by affiliates of private equity firms Clayton, Dubilier & Rice and KKR & Co, will own about 13 percent of Sysco after the closing of the deal, which will create a company with revenue of $65 billion.
“Combining and maximizing the significant strengths of two outstanding companies is certain to be of tremendous advantage in supporting our customers,” US Foods Chief Executive John Lederer said in a statement on Monday.
Sysco and US Foods distribute foods to restaurants, hotels, hospitals, schools and other institutions.
Clayton, Dubilier & Rice and KKR acquired the former U.S. Foodservice from Dutch grocer Ahold for $7.1 billion in 2007.
Sysco said the deal is expected to add to earnings immediately after closing, expected in the third quarter of 2014.
Goldman Sachs & Co is financial adviser to Sysco, while Wachtell, Lipton, Rosen & Katz and Arnall, Golden & Gregory LLP are legal advisers. Simpson Thacher & Bartlett LLP and Debevoise & Plimpton LLP are legal advisers to US Foods.
Maria Ajit Thomas is a reporter for Reuters News in Bangalore