Sysco Corporation (NYSE:SYY), North America’s leading foodservice distributor, has reached a definitive agreement to buy Brakes Group, a leading European foodservice distributor with operations in the United Kingdom, Ireland, France, Sweden, Spain, Belgium and Luxembourg. Brakes Group is owned by Bain Capital Private Equity. The transaction is valued at approximately $3.1 billion USD (approximately 2.2 billion British pounds) and includes the repayment of approximately $2.3 billion of Brakes Group’s financial debt.
Unanimously approved by Sysco’s Board of Directors, the transaction expands Sysco’s footprint in the UK and Ireland and further intoEurope and positions the company for potential future expansion in these markets. The deal is subject to customary regulatory review byEuropean Union competition authorities. The companies expect to complete the transaction before the end of Sysco’s fiscal year in July 2016.
Headquartered in London, Brakes Group will operate as a standalone company within Sysco. The Brakes Group business will continue to be led by chief executive officer Ken McMeikan. His management team and the rest of the employee base will remain in place.
“We look forward to welcoming Brakes Group, its 15,000 employees, and Ken McMeikan and his highly respected leadership team to theSysco family of companies,” said Bill DeLaney, Sysco chief executive officer. “This transaction will unite Sysco with a leading foodservice distributor in Europe with demonstrated capability to sustainably grow its business over time. Beginning with a common customer-centric mindset, our companies are strategically aligned with compatible cultures and similar business models. We expect to retain key members of Brakes Group’s talented leadership team and to experience little distraction from integration given the minimal overlap of the businesses. Sysco’s management team remains confident in and committed to achieving our previously announced three-year plan financial objectives.”
“Since we bought Brakes Group in 2007, the business has been transformed with capital investment of more than 100 million British pounds in an e-commerce platform, multi-temperature distribution infrastructure, and customer service enhancements,” said Dwight Poler, a managing director of Bain Capital Private Equity. “There is still a huge market opportunity ahead that I am confident Brakes Group is very well placed to deliver with Sysco.”
“It’s very exciting for Brakes Group to be joining the recognized worldwide leader in foodservice distribution,” said McMeikan. “Last year we said we would look for the best strategic option for Brakes Group’s next stage of development. We are delighted to have now concluded this process by joining Sysco. Our mission is simple: to help businesses who serve food to thrive, and becoming part of theSysco family will help us get closer toward achieving that great outcome for our customers, colleagues and suppliers. Similar to Sysco’s approach, Brakes Group serves thousands of customers across Europe every day, including pubs, restaurants, hotels, hospitals, schools, contract caterers and more. We have continued to flourish in recent years, and the significant investment that has been made in Brakes Group provides us with a very solid platform for further growth as part of Sysco.”