December 30, 2019 04:15 PM (EST)
RICHMOND, Va.--(BUSINESS WIRE)--Performance Food Group Company (PFG) (NYSE: PFGC) announced today that it has completed the acquisition of Reinhart Foodservice, L.L.C. (Reinhart). With the close of the transaction, PFG is now positioned as one of the largest distributors in the U.S., with approximately $30 billion in annual net revenue and nearly 25,000 talented associates. PFG continues to expect to generate approximately $50 million of annual run-rate cost synergies in the third full fiscal year following today’s close. This is anticipated to result in low single-digit Adjusted Diluted EPS accretion in the first full fiscal year and low double-digit accretion expected in the third full fiscal year.
“We are excited to close the acquisition and welcome Reinhart’s many talented associates to the PFG family of companies,” said George Holm, PFG Chairman, President & CEO. “The Reyes family has built a strong business and this transaction expands PFG’s platform to help our diverse customer base thrive. We are honored to add Reinhart’s proud history to PFG and look forward to creating shared success in the future."
“We are happy to welcome Reinhart to PFG,” said Craig Hoskins, PFG Executive Vice President and President & CEO of PFG’s Foodservice Segment. “Reinhart brings complementary strengths that will expand Performance Foodservice’s broadline presence, improve our network efficiency and help us achieve our long-term growth goals. There will be many opportunities for our organizations to learn from each other as Reinhart becomes an important part of PFG’s Foodservice Segment.”
Compelling Strategic and Financial Benefits
- Expands Geographic Reach and Overall Scale: The addition of Reinhart’s distribution footprint in key geographies enhances PFG’s existing distribution platform and market density.
- Complementary Customer-Centric Operating Models: Consistent go-to-market approaches and selling cultures are focused on customer success.
- Enhances Attractive Customer Base and Product Offerings: Reinhart has a diverse customer base which includes independent restaurants, healthcare, education and other segments. The combined portfolio of proprietary brands broadens PFG’s offering.
- Significant Synergy Opportunities: PFG continues to expect to achieve approximately $50 million in annual run-rate cost synergies in the third full fiscal year following the close of the transaction. Cost synergies have been identified primarily in procurement, operations, and logistics. PFG estimates one-time capital expenditures of $90 million in IT upgrades and integration over the next five years. Reinhart’s ongoing maintenance capital expenditures are approximately $50 million which is in line with PFG’s capital expenditures to net sales ratio.
- Compelling Financial Impact: On a percentage basis, excluding transaction-related depreciation and amortization, PFG expects the transaction to be low single-digit accretive to Adjusted Diluted EPS in the first full fiscal year following the close and low double-digit accretive to Adjusted Diluted EPS in the third full fiscal year following the close. PFG is targeting a net debt-to-Adjusted EBITDA ratio of less than 4.0x within 18 months following closing of the transaction.
About Performance Food Group Company
Built on the many proud histories of our family of companies, Performance Food Group is a customer-centric foodservice distribution leader headquartered in Richmond, Virginia. Grounded by roots that date back to a grocery peddler in 1885, PFG today has a nationwide network of over 100 distribution centers, nearly 25,000 talented associates and thousands of valued suppliers across the country. With the goal of helping our customers thrive, we market and deliver quality food and related products to over 200,000 locations including independent and chain restaurants, schools, business and industry locations, healthcare facilities, vending distributors, office coffee service distributors, big box retailers, theaters and convenience stores. Building strong relationships is core to PFG’s success – from connecting associates with great career opportunities to connecting valued suppliers and quality products with PFG’s broad and diverse customer base. To learn more about PFG, visit pfgc.com.