Highlights of the Acquisition:

  • Adds highly respected leader in the rapidly growing fresh-cut produce industry
  • Expands Performance Food Group’s fresh-cut operations into Midwest
  • Offers potential for increased operating profit margins
  • Creates considerable synergies and cost savings opportunities
  • Expected to have positive impact on earnings per share growth

Performance Food Group (Nasdaq/NM:PFGC) today announced that it has signed a definitive agreement to acquire privately owned Redi-Cut Foods, Inc. (“Redi-Cut”), one of the nation’s largest independent fresh-cut produce processors with facilities in Chicago and Kansas City. The total consideration to be paid for the acquisition is approximately $133 million, including cash, common stock of Performance Food Group and assumption of liabilities. The acquisition is expected to have a positive impact on Performance Food Group’s earnings per share growth in 2001, increasing thereafter. Based upon projections for the Redi-Cut business, Performance Food Group currently expects the acquisition to be approximately $.05 per share accretive to its anticipated full-year results for 2001. Performance Food Group’s ability to achieve these results will depend upon Redi-Cut’s results of operations, the ability to achieve expected synergies from the acquisition and the exact cost of financing the transaction. The transaction, which remains subject to customary closing conditions, will be accounted for as a purchase, and structured to allow for tax-deductible acquisition goodwill. Closing is expected late in the fourth quarter of 2000 or in early 2001.

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Redi-Cut, based in Chicago, is a leading processor of fresh-cut produce to the nation’s leading quick-service restaurants and other sectors of the home meal replacement industry. The company, which is expected to report net sales of approximately $130 million for 2000, operates two modern processing facilities, including a recently completed 53,000 square foot plant in Kansas City. With a history of product innovation, quality and service, Redi-Cut has created one of the leading pre-cut commercial brands in the produce industry and built a leading market presence in the Midwest where it currently serves 95% of the region’s quick-service restaurants.

Robert C. Sledd, Chairman and Chief Executive Officer of Performance Food Group, remarked, “The acquisition of Redi-Cut represents an important step in the execution of our strategy to become a leading national processor/distributor of fresh-cut produce to multi-unit restaurant chains and other foodservice outlets. The addition of Redi-Cut will broaden our geographic reach to include the Midwest, where Redi-Cut has been an industry leader with the highest quality standards and well-established operating systems. We look forward to this outstanding management team joining our company and are confident in our abilities to assimilate these operations seamlessly with our own.”

Phil Cooper, Chairman of Redi-Cut, remarked, “We are excited about the prospect for joining Performance Food Group. The fresh-cut produce processing market is continuing to grow rapidly, and we believe that combining our resources will enable us to meet the needs of significantly more customers.” Upon closing of the acquisition, Carey Cooper, President and Chief Executive Officer of Redi-Cut, is expected to serve as Chief Operating Officer of Performance Food Group’s fresh-cut produce processing operations.

Performance Food Group markets and distributes more than 25,000 national and private label food and food-related products to approximately 25,000 restaurants, hotels, cafeterias, schools, healthcare facilities and other institutions. For more information on Performance Food Group, visit www.pfgc.com.

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Certain statements made herein are forward-looking statements under the Private Securities Litigation Reform Act of 1995. They include statements regarding anticipated earnings for next year, sales momentum, customer and product sales mix, expected efficiencies in the Company’s business and the ability of Performance Food Group to realize expected synergies following acquisitions. These statements involve risks and uncertainties and are based on current expectations and management’s estimates; actual results may differ materially. The risks and uncertainties which could impact these statements include, but are not limited to, the relatively low margins and economic sensitivity of the foodservice business, thee Company’s reliance on major customers, the ability to identify and successfully complete acquisitions of other foodservice distributors and management of the Company’s planned growth, all as detailed from time to time in the reports filed by the Company with the Securities and Exchange Commission.