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Performance Food Group Acquires Reinhart Food Service

07/08/2019

Performance Food Group (PFGC) has announced an all-cash $2 billion purchase of privately- held Reinhart Food Service.

 

The combined company will have projected sales of $24 to $26 billion and will operate 106 distribution centers employing 24,000.

For the nine months ending March 30th, Performance Food Group generated $103.6 million net earnings on sales of $13.84 billion.  Comparative figures for FY 2018 were $134.3 million net earnings on sales of $13.02 billion.  The decline in profit was associated with increased costs for vehicle operation including drivers.

 

On a 12-month trailing basis, Performance Food Group has posted a return on assets of 4.2 percent and 14.6 percent on equity.  Market capitalization is $4.2 billion, corresponding to asset value.  Prior to the acquisition the company carried $1.04 billion in long-term debt.

 

The CEO of Performance Food Group, George Holm commented that there was minimal customer overlap between performance and Reinhart.  The acquisition will strengthen the ability of Performance Foods to service convenience stores, vending machines and movie theaters.

 

The acquisition should result in up to $50 million annually in cost savings in 2021 although there is no intention to either close existing distribution centers or to lay off Reinhart workers.