US Foods To Buy Smart Foodservice Warehouse Stores For $970 Mln In Cash

(RTTNews) - US Foods Holding Corp. (USFD) said that it agreed to buy Smart Foodservice Warehouse Stores from funds managed by affiliates of Apollo Global Management Inc. (APO) for $970 million in cash.

The transaction excludes the Smart & Final retail grocery business, which was separated from Smart Foodservice prior to the execution of the definitive agreement.

US Foods will finance the acquisition primarily with $700 million in fully committed financing from Citigroup and Bank of America and will fund the balance of the purchase price through its existing liquidity resources.

US Foods expects that the transaction will be accretive to adjusted earnings per share in the first year post close, growing to be mid-single digit accretive as synergies are realized.

US Foods expects to achieve about $20 million in annual run-rate cost synergies by 2024, primarily through purchasing efficiencies and expansion of private brand products.

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. Founded in 1955 and headquartered in the greater Portland, Oregon area, Smart Foodservice employs approximately 900 associates.