US Foods acquires Smart Foodservice Warehouse Stores for US$970m

USA – American food company and food distributor service, US Foods Holding has completed the acquisition of Smart Foodservice Warehouse Stores for US$970 million in an all cash transaction.

The transaction, which was announced in March this year, excludes the Smart & Final retail grocery business – a business that was previously separated from Smart Foodservice.

Founded in 1955 and headquartered in the greater Portland, Oregon area, Smart Foodservice operates 70 small-format cash and carry stores in seven US states and employs approximately 900 associates.

The company serves small and mid-sized restaurants and other food business customers with a broad assortment of products.

Smart Foodservice had 2019 revenues of approximately US$1.1 billion and approximately US$85 million in Adjusted EBITDA (including standalone cost estimates).

Following the acquisition, US Foods said that Smart Foodservice will operate as a separate operating unit within the company with minimal integration required.

US Foods Chairman and CEO Pietro Satriano, said the acquisition will enable the company expand its multi-channel strategy particularly tap into the expanding use cash and carry as a convenient, cost-effective purchasing option.

Cash and carry is a large, attractive and growing channel of the food service industry. The US$17 billion cash and carry channel of the foodservice industry is growing at 4-5% annually.

This channel is especially relevant with small and mid-sized independent restaurants seeking a convenient, cost effective purchasing option.

Cash and carry also accelerates profitable growth with independent restaurants as it provides opportunities to reach new customers who prefer a self-serve model and offers an additional channel for growth with existing customers. Cash and carry

US Foods sees higher case volume growth with customers who place delivered orders and purchase through existing CHEF’STORE cash and carry locations.  “We are pleased to welcome Smart Foodservice to the US Foods family,” said Pietro Satriano.

“With our shared commitment to supporting restaurant operators and providing best-in-class customer service, Smart Foodservice will complement our CHEF’STORE cash and carry model and provide a platform to enhance our presence in this attractive channel.”

US Foods recently received a US$500 million equity investment from Global investment firm, KKR, through its affiliates KKR Americas XII Fund.

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