US Foods Holding Corp. has entered into a definitive agreement to acquire SGA’s Food Group of Companies for $1.8 billion in cash.
Based in Scottsdale, Ariz., SGA’s Food Group of Companies operates as five separate entities: Food Services of America, Inc. (F.S.A.); Systems Services of America, Inc. (S.S.A.); Amerifresh, Inc.; Ameristar Meats, Inc.; and GAMPAC Express, Inc. The combined companies serve approximately 33,000 customers, operate 12 distribution centers and own more than 20 private brands. SGA had 2017 net sales of $3.2 billion and employs approximately 3,400.
The F.S.A. operating company is one of the largest regional broadline distribution companies in the United States, US Foods said. It serves 16 states in the West and Midwest from nine distribution centers, and 40% of its net sales base comes from serving independent restaurants. F.S.A. accounts for 75% of SGA’s net sales.
S.S.A. is a multi-unit distribution food service company that distributes to casual and fast-casual dining establishments as well as regional and national quick-service restaurant chains. S.S.A. provides 21% of SGA’s net sales.
Amerifresh, Inc. offers produce sourcing and marketing capabilities and makes up 2% of SGA’s net sales.
SSA truckAmeristar Meats, Inc. provides custom meat products, including 18 beef programs to meet customer specifications. Ameristar accounts for 1% of SGA’s net sales.
GAMPAC Express, Inc. is a supply chain planning and logistics company that provides 1% of SGA’s net sales.
As a result of the acquisition, US Foods said it expects to achieve approximately $55 million in annual run-rate cost synergies by the end of fiscal 2022, driven by savings in distribution, procurement and administrative expenses.
“This acquisition will significantly increase US Foods’ reach across key markets in the attractive and growing Northwest region of the U.S. and adds one of the most well-regarded regional distributors to our company,” said Pietro Satriano, chairman and chief executive officer of US Foods. “With a shared commitment to customer service, including a proven track record of leveraging technology and private brands to meet customer needs, SGA’s Food Group of Companies is an ideal fit. The company’s unique merchandising programs, mature local sourcing capabilities and track record of operational excellence will be strong additions to our business. We look forward to welcoming the talented teams at SGA’s Food Group of Companies to US Foods, providing customers with even better service and expanded capabilities, and delivering accelerated growth and value to our shareholders.”
By Rebekah Schouten
Source: Food Business News
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