Richmond-based Performance Food Group (PFG), marketer and distributer of more than 44,000 national and private label food and food-related products, has signed a definitive agreement to acquire the common stock of Quality Foods, a privately owned, broadline foodservice distributor based in Little Rock, Arkansas.
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The transaction is valued at approximately US$95m including cash and assumption of certain liabilities. The purchase price is subject to increase to a total of US$119m if Quality Foods achieves certain specified levels of financial performance in the three years following closing.
C. Michael Gray, president and CEO of PFG, said: “We are excited about adding this well-managed, Pocahontas broadliner to our operating base.
“Quality Foods offers a strong centre-of-the-plate focus and has a favourable mix of business with street sales contributing 55% of sales. It has compiled an outstanding record of growth and has a service region that is geographically contiguous to our other broadline businesses.
“An important component of our corporate growth strategy remains acquiring other complementary foodservice operations, thereby extending our geographic reach. We are confident about integrating this Pocahontas partner effectively into our broadline segment.
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By GlobalData“Because of costs associated with the recent opening of the Batesville facility, we expect accretion of only US$0.01/share to earnings for 2002, but anticipate an incremental contribution of US$0.04/share to earnings for 2003.”
Philip Tappan, president and COO of Quality Foods, remarked: “Joining PFG marks an important milestone for us.
“We have a 20-year relationship with PFG’s Pocahontas buying and marketing group. We share a core emphasis on delivering consistently high customer satisfaction as well as a strong commitment to support our associates with the ongoing training that can enhance their individual talents.
“Changes in the foodservice distribution business demand an increasing investment in capital resources, and PFG will accordingly help support our aggressive plans for growth, which will in turn sustain our market leadership.”
The transaction, which has been structured to provide for the tax deductibility of goodwill, is subject to customary closing conditions and is expected to be completed during the Q2.
