By MICHAEL J. DE LA MERCED
Sysco agreed on Monday to buy US Foods for about $3.5 billion in stock and cash, uniting two of the biggest food distributors in the country.
Under the terms of the deal, Sysco will pay $3 billion in stock and $500 million in cash. The transaction will give US Foods’ current owners, the investment firms Clayton, Dubilier & Rice and Kohlberg Kravis Roberts, a stake of roughly 13 percent in the combined company.
Including the assumption of US Foods’ debt, the transaction is valued at $8.2 billion.
By buying one of its largest rivals, Sysco will solidify its position as the reigning giant of food distribution. The company, whose trucks move millions of pounds of frozen food and kitchen supplies around the country, expects its annual revenue to grow by 46 percent, to $65 billion.
The deal will also give US Foods’ owners a path to exit their investment. Clayton Dubilier and K.K.R. bought the company from the Dutch grocery store company Royal Ahold in 2007 for about $7.1 billion, which included debt.
The company continued to increase its sales after its leveraged buyout, reporting $21.7 billion in revenue last year…..