SYSCO AND US FOODS AGREE TO MERGE, CREATING A WORLD-CLASS FOODSERVICE COMPANY

According to the Company merger website www.bestofbothinfood.com, the combination brings together the best of both companies to do more for our customers and invest in accelerating the transformation of Sysco and the industry and the total enterprise value will be $8.2 billion.  

Sysco will pay approximately $3.5 billion for the equity of US Foods, comprising $3 billion of Sysco common stock and $500 million of cash. As part of the transaction, Sysco will also assume or refinance US Foods’ net debt, which is currently approximately $4.7 billion, bringing the total enterprise value to $8.2 billion. 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 87 million shares, or roughly 13% of Sysco.

Sysco facts- Since the initial public offering in 1970, when sales were $115 million, Sysco has grown to $44 billion in sales for fiscal year 2013. Today, Sysco has sales and service relationships with approximately 425,000 customers. Operating from 193 locations throughout the U.S., Bahamas, Canada, Ireland & Northern Ireland, Sysco's product lines are as diverse as the 48,100 employees

US Foods facts- With approximately $22 billion in annual revenue, the company offers more than 350,000 products. The company proudly employs approximately 25,000 people in more than 60 locations nationwide.

Sysco Chief Executive Bill DeLaney said the Federal Trade Commission (FTC), which rules on antitrust matters, would certainly scrutinize the deal but he noted that there were about 15,000 private companies involved in the U.S. food distribution industry. Three antitrust experts agreed that the deal would get a close look, and that the FTC could order some asset sales.

Sysco is the largest operator in the U.S. food distribution business, with US Foods in the No. 2 spot. The combined company will have 25 to 30 percent of the market, two of the experts said. The plan is to close the deal in the third quarter which means the two companies plan on tough meetings with regulators

You can read the Public Release Document Here, or visit the merger Website Here.