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December 9, 2013
08:06 EDTSYY, KKRSysco to buy privately-held US Foods in deal with total enterprise value $8.2B
Sysco Corporation (SYY) and US Foods announced an agreement to merge, creating a world-class foodservice company. The total enterprise value of the transaction is approximately $8.2B and the combination has been approved by the Board of Directors of each company. Bill DeLaney, Sysco president and chief executive officer, will lead the combined company, which will continue to be named Sysco and headquartered in Houston, Texas. Sysco will pay approximately $3.5B for the equity of US Foods, comprising $3B of Sysco common stock and $500M of cash. As part of the transaction, Sysco will also assume or refinance US Foods' net debt, which is currently approximately $4.7B, bringing the total enterprise value to $8.2B. Sysco has secured fully committed bridge financing and expects to issue permanent financing prior to closing. After completion of the transaction, the equity holders of US Foods will own approximately 87M shares, or roughly 13% of Sysco. A representative of each of US Foods' majority shareholders, affiliates of Clayton, Dubilier & Rice and Kohlberg Kravis Roberts & Co. (KKR), will join Sysco's Board of Directors upon closing. At closing, the combined companies are expected to have annualized sales of approximately $65 billion and generate operating cash flows of approximately $2 billion. Sysco will purchase the outstanding equity of US Foods and assume or refinance its net debt in a transaction with an enterprise value of $8.2B. This represents a 9.9x multiple of US Foods' trailing 12-month as of September 28 adjusted EBITDA of $826M. Additionally, the transaction is expected to generate significant strategic benefits and cost synergies, achieving annual synergies of at least $600M after three to four years, primarily stemming from supply chain efficiencies, merchandising activities, and overlapping general and administrative functions. The transaction is expected to be immediately accretive to earnings after adjusting for transaction-related costs and amortization of intangibles. The transaction, which is expected to close in the third quarter of calendar year 2014, is subject to customary closing conditions and regulatory approvals, including antitrust approval.
News For SYY;KKR From The Last 14 Days
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April 14, 2014
08:31 EDTKKRBlackstone and Goldman Sachs to acquire Ipreo from KKR
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07:20 EDTKKRKKR to sell Ipreo to Blackstone, Goldman Sachs for $975M, Financial Times says
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April 10, 2014
06:41 EDTKKRGo Daddy hires Morgan Stanley, JPMorgan for IPO, NY Times says
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April 8, 2014
07:56 EDTKKRKKR latest PE firm to increase focus on fast-growing tech, FT says
KKR (KKR), following in the recent steps of private equity peers Blackstone (BX), CVC Capital Partners and TPG, is bolstering its technology team and is considering a specialist fund to invest in fast-growing tech companies, reported Financial Times. Reference Link

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