Save on Seafood

US Foods Inc. (NYSE: USFD) is buying seafood distributor Save on Seafood to expand its reach in the Southeast U.S. The deal continues the buyer’s acquisition spree after a proposed merger with competitor Sysco Corp. (NYSE: SYY) fell apart.

St. Petersburg, Florida-based Save on Seafood provides frozen seafood to grocery stores and restaurants in the Southeast. The target’s products include: whole fish, fish fillets, shrimp, shellfish, lobster, octopus, and other specialty items like shrimp burgers. Save on Seafood food generated more than $80 million in annual sales and will now operate as a subsidiary of US Foods, joining the buyer’s stock yards business. As part of the deal, US Foods will retain the target’s 170 employees and its production facility in Florida. The deal is expected to close on Oct. 28th.

US Foods, headquartered in Rosemont, Illinois, is a foodservice distributor throughout the U.S. serving chefs, independent and multi-unit restaurants, healthcare, hospitality, government and educational customers. The buyer reported $11.4 billion in net sales for the first six months of 2016 and also raised $1.1 billion through an initial public offering in 2016 to reduce the company’s debt. US Foods is backed by Kohlberg Kravis Roberts & Co. (NYSE: KKR) and Clayton Dubilier & Rice, and the two firms have kept a stake in US Foods after the IPO. 

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 the deal. Following the collapse of the merger, US Foods has agreed to purchase fruit and vegetable processor Freshway Foods; bought Food Genius, a provider of foodservice data and analytics applications; and has reached a deal to buy assets of Cara Donna Provision Co., a wholesale distributor to 1,300 restaurants and foodservice businesses in New England. 

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