US Foods Inc. is acquiring Freshway Foods, a fruit and vegetable processor and distributor to Eastern U.S. customers. The buyer began hunting for other acquisitions after the proposed merger with Sysco Corp. (NYSE: SYY) got called off.
Terms of the deal were not disclosed. US Foods will keep Freshway’s Sidney, Ohio, 100,000-square-foot building open and Freshway’s more than 400 employees will become US Foods employees. Freshway cuts, cleans, chops and packages raw produce for customized products delivered to foodservice companies and retailers in the Eastern U.S. The company also has a logistics and transportation business that offers full-truckload and less-than-truckload service in its distribution area. Freshway Foods is owned by brothers Phil and Frank Gilardi, who formed the business in 1988 out of their father’s food wholesale business.
US Foods, based in Rosemont, Illinois, is a distributor serving chefs and foodservice operators in the U.S., including independent and multi-unit restaurants, and healthcare, hospitality, government and educational customers. The company has about 25,000 employees in 61 locations. US Foods is backed by Kohlberg Kravis Roberts & Co. (NYSE: KKR) and Clayton Dubilier & Rice. The company reported net sales of $23 billion in its 2014 fiscal year.
US Foods has been making deals since its proposed $8.2 billion merger with rival Sysco Corp. (NYSE: SYY) was called off in 2015 after regulators objected. In April, the company acquired Food Genius, provider of foodservice data and analytics applications. In February, it announced an agreement to acquire assets of Cara Donna Provision Co., a wholesale distributor to 1,300 restaurants and foodservice businesses in New England. In December 2015, it announced it would acquire Dierks Waukesha, a family-owned produce distributor to 3,500 restaurants, schools and institutions in the Wisconsin, Illinois, Michigan and Minnesota with $120 million in annual sales. Terms were not disclosed for any of the three deals.
US Foods has also filed for an initial public offering, in February, aiming to raise about $1 billion. It would list on the New York Stock Exchange under the ticker symbol USFD.