US-based food distributor and supplier Performance Food Group (PFG) has signed a definitive agreement with Reyes Holdings to acquire Reinhart Foodservice for a total consideration of $2bn.

The deal value covers approximately $1.7bn net of an estimated tax benefit to PFG of approximately $265m.

Headquartered in Rosemont, Illinois, Reinhart is a foodservice distributor with 26 centres across the country.

The company sold approximately 90,000 SKUs to 42,500 customers and employs approximately 5,600 associates.

The deal enhances PFG’s existing distribution platform and market density in key markets, as well as expands its footprint with the addition of new customers across independent restaurants, healthcare, education and other segments.

PFG chairman, president and CEO George Holm said: “We believe the addition of Reinhart and its complementary strengths will expand Performance Foodservice’s broadline presence, improve our network efficiency and help us achieve our long-term growth goals.

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“This transaction provides us with a greater overall scale, a diverse customer base, including a solid base of independent customers, and builds upon our strong distribution platform.

“We believe these attributes, along with attractive financial characteristics, will enhance our ability to continue to deliver the service our customers need to succeed and create shareholder value.”

PFG’s board of directors and the governing body of Reinhart have approved the transaction.

However, it is still subject to the US federal antitrust clearance and other customary closing conditions. The company expects to close the deal by the end of this year.

The company will fund the $2bn transaction using borrowing on the company’s asset-based revolving credit facility, new senior unsecured notes and equity proceeds of $300m to $400m.

Affiliates of Credit Suisse and Wells Fargo also offered committed financing for the transaction.