After US Foods Deal Fails, Sysco Makes Another Acquisition in Foodservice Distributor Brakes Group
In 2015, Sysco purchased Gilchrist & Soames and Tannis Trading
Sysco Corp. (NYSE: SYY) agreed to buy food-service distributor Brakes Group from private equity firm Bain Capital in a $3.1 billion deal, giving the company a bigger foothold in Europe.
The transaction includes repaying $2.3 billion of Brakes debt, Houston-based Sysco said in a statement Monday. The acquisition is slated to be completed before the end of Sysco’s fiscal year in July.
Sysco, the largest North American food-service distributor, is looking to Europe for growth after a failed attempt to buy domestic competitor US Foods for $3.5 billion in 2015. That deal was blocked by a federal judge, who said a merger of the food-distribution giants would probably reduce competition and raise prices for hotels and restaurants.
Since Sysco ended its pursuit of US Foods, the company began making smaller acquisitions. In May 2015, the company bought Ottawa, Ontario-based food distributor Tannis Trading Inc. for undisclosed terms. Tannis has about $118 million in annual revenue. In September 2015, Sysco subsidiary Guest Supply acquired Gilchrist & Soames, a Plainfield, Indiana-based supplier of soaps, body lotions and shampoos to hotels and spas, from Swander Pace for undisclosed terms. Guest Supply provides personal care and bath products along with room accessories, such as ice buckets, to hotels.
Brakes, based in London, has 15,000 employees and operations in the U.K., Ireland, France, Spain and other European countries.
US Foods, meanwhile, is seeking to raise about $1 billion in an initial public offering, people familiar with the matter said earlier this month.
-- Additional Reporting By Demitri Diakantonis
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