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July 31, 2018

US Foods to buy SGA’s Food Group of Companies for $1.8bn

US Foods has signed a definitive agreement with Services Group of America (SGA) to purchase five operating companies for $1.8bn in cash. 

US Foods has signed a definitive agreement with Services Group of America (SGA) to purchase five operating companies for $1.8bn in cash.

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Collectively known as SGA’s Food Group of Companies, the five entities involved in the deal are Food Services of America (FSA), Systems Services of America (SSA), Amerifresh, Ameristar Meats, and Gampac Express.

FSA is a regional broadline distribution company in the US, serving 16 states through nine distribution centres.

SSA is a multi-unit distribution foodservice company offering distribution services to casual and fast casual dining establishments, as well as regional and national QSR chains.

Amerifresh offers produce sourcing and marketing capabilities, Ameristar Meats delivers custom meat products, and Gampac Express provides supply chain planning and logistics services.

US Foods chairman and CEO Pietro Satriano said: “This acquisition will significantly increase US Foods’ reach across key markets in the attractive and growing north-west region of the US and adds one of the most well-regarded regional distributors to our company.

“SGA’s Food network of 33,000 customers, 12 distribution centres and more than 20 private brands will enhance US Foods’ overall scale.”

“With a shared commitment to customer service, including a proven track record of leveraging technology and private brands to meet customer needs, SGA’s Food Group of Companies is an ideal fit.

“The company’s unique merchandising programmes, mature local sourcing capabilities and track record of operational excellence will be strong additions to our business.

“We look forward to welcoming the talented teams at SGA’s Food Group of Companies to US Foods, providing customers with even better service and expanded capabilities, and delivering accelerated growth and value to our shareholders.”

US Foods’ board of directors have unanimously approved the transaction. However, it is subject to regulatory approval and other customary closing conditions.

The deal is expected to expand the company’s network in the north-west. SGA’s Food network of 33,000 customers, 12 distribution centres and more than 20 private brands will enhance US Foods’ overall scale.

In addition, the transaction will allow US Foods to achieve approximately $55m in annual run-rate cost synergies by the end of fiscal 2022.

US Foods will finance the transaction primarily with $1.5bn through a fully committed term loan financing from JP Morgan and Bank of America Merrill Lynch, with the remainder through its existing liquidity resources.

Free Report
img

How is technology having an impact on Consumer buying behavior?

As the world rapidly becomes more connected, it is important for brands to understand the impact that improved technology is having on consumer purchasing behaviors. To react effectively, brands must know how to engage with increasingly digitally savvy consumers. GlobalData’s latest Trend Tracker report provides an analysis of Digital Lifestyles – one of GlobalData's top consumer trends for 2022. The report includes an overview of how digital lifestyles are evolving, including the significant impact that the COVID-19 pandemic had on accelerating digitalization, and how this trend is emerging across different Consumer sectors. Key features included in the report:
  • A breakdown of the trend’s prominence across sectors
  • Insights into consumer online penetration, preferred electronic devices and engagement
  • The key drivers and challenges impacting the digital lifestyles trend
  • A spotlight on key innovations set to reshape the consumer landscape
  • Analysis of what’s next for digital innovations and how brands can leverage the trend
Download this report to keep in touch with the more digital consumer.
by GlobalData
Enter your details here to receive your free Report.

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