When the new year began it looked as if the large take-private buyout would be dormant through the first quarter. But that’s not keeping the likes of Blackstone Group from staying busy, as the firm cinched a $1.3 billion deal to acquire Performance Food Group. Interestingly, the firm partnered with mid-market LBO shop Wellspring Capital Management.
The New York private equity firms have agreed to pay $34.50 for the Richmond, Va.-based food distributors Nasdaq-traded shares, marking a 42.6% premium over their closing price of $24.19 per share on Thursday.
Blackstone officials declined to comment on the public-company purchase. But, in a statement Blackstone senior managing director Prakash Melwani said Performance Food Group is extremely well positioned to continue building on its strong history of growth as a high-quality food distributor.
The agreement, which isnt subject to a financing condition, has a 50-day go-shop provision.
Performance Food markets and distributes more than 68,000 national and private label food and food-related products to more than 41,000 restaurants, hotels cafeterias and hospitals.
The company is expected to remain headquartered in Richmond. Its board has already approved the transaction.
The deal made for an intriguing pairing, as Blackstone hasn’t pursued nearly as many club deals as its counterparts in the large market. For example, recent deals for Hilton Hotels, RGIS Holdings, Pinnacle Foods, Alliance Data (which still hasn’t closed) and others, were all done on a solo basis.
However, Blackstone currently co-invests with Wellspring in Vistar Corp. Blackstone had acquired a 67% stake in the company from Wellspring back in September, with Wellspring rolling equity back into the business to maintain a 22% stake.
Once the Performance transaction closes, Performance Food will be combined with Vistar.
Blackstone and Wellspring have agreed to pay a $40 million termination fee if they break their agreement to acquire Performance Food.
Evercore Group is serving as financial adviser to Performance Food, which relied on Bass, Berry & Sims for counsel. Wachovia, Goldman Sachs and Credit Suisse are serving as financial advisors to Blackstone and Wellspring, which is relying on Simpson Thacher & Bartlett for counsel.