USA – Global investment firm, KKR – through its affiliates – has announced a US$500 million equity investment in American food company and a leading foodservice distributor, US Foods Holding Corp.
The investment was made through purchase of newly issued convertible preferred stock in US$28 billion foodservice company. KKR said that it will be funding the investment primarily through its KKR Americas XII Fund.
According to a statement issued by the food company KKR’s US$500m convertible preferred stock investment carries a 7% dividend. On an as-converted basis, the preferred stock will represent approximately 9.6% of pro forma common shares outstanding.
“We are pleased to see KKR return as a shareholder of US Foods as we seek to further fortify our balance sheet during the current difficult environment,” said US Foods Chairman and CEO Pietro Satriano.
“KKR will be a valuable partner for us as we continue to focus on our associates, customers, communities and shareholders as the impacts of COVID-19 unfold.
“This transaction positions us to continue to build on our strengths as the environment improves over time.”
Nate Taylor, Partner and Co-Head of Americas Private Equity at KKR said, “We are excited to once again partner with the strong management team at US Foods.
“Given our history as a long term investor in the company, we are very familiar with the sector and US Foods’ leading position and believe the company has the capabilities and resources to navigate the current environment and create value over the long term.”
In connection with the transaction, US Foods expects to appoint Nate Taylor as a new director to its Board.
US Foods has also announced that it expects to close its previously announced acquisition of Smart Foodservice Warehouse Stores on Friday, April 24.
Smart Foodservice operates 70 small-format cash and carry stores across California, Washington, Oregon, Idaho, Nevada, Utah and Montana that serve small and mid-sized restaurants and other food business customers with a broad assortment of products.
The investment in US Foods is KKR’s latest deal in the food and beverage industry.
In 2017, KKR, which manages multiple alternative asset classes, including private equity, energy, infrastructure, real estate has acquired Unilever’s global spreads business for US$8.03 billion.
Unilever’s spreads business, which counted of brands like Becel, Flora, Country Crock, Blue Band, I Can’t Believe It’s Not Butter, Rama and ProActiv, was intregrated under Upfield Group, a plant-based butter and spreads producer owned by KKR.
Earlier this year, Upfield Group announced that it had completed the acquisition of Violife brand owner, Arivia, headquartered in Thessaloniki, Greece.
In 2019, Campbell Soup announced the sale of Arnott’s and other parts of Campbell’s International operations to KKR for US$2.2 billion.