RICHMOND, Va. — Performance Food Group Company announced that it has entered into a definitive agreement with Cheney Bros. Inc., a leading independent broadline foodservice distributor based in Riviera Beach, Florida, and owned by the Cheney family and Clayton Dubilier & Rice, pursuant to which PFG will acquire Cheney Brothers for $2.1 billion in cash.
The acquisition will create a stronger presence in the Southeast region and provide additional distribution capacity. Cheney Brothers generates approximately $3.2 billion in annual revenue.
“Cheney Brothers will be an outstanding addition to our Foodservice segment, and we are excited to welcome their many talented associates to the PFG family of companies”, said George Holm, PFG chairman & CEO. “This acquisition will expand and enhance our offerings to a high-quality and diverse customer base. We have long admired the success of Cheney Brothers in the Southeastern U.S. and believe that the combination of our organizations will push the business to new heights. We are excited for what the future holds for the newest addition to PFG.”
“On behalf of the 3,600 Cheney Brothers associates, allow me to express our excitement at the prospect of being part of PFG’s organization”, said Byron Russell, Cheney Brothers’ CEO. “I have watched PFG grow into one of the country’s largest foodservice distributors by fostering new business relationships and maintaining a strong company culture. I believe this transaction will bring together two winning organizations and create a significant platform for growth. Together, the companies will build upon each other’s strengths and achieve outstanding success in the years ahead.”
Compelling Strategic and Financial Benefits
- Expands Geographic Reach: The addition of Cheney Brothers’ distribution footprint in key geographies enhances PFG’s existing distribution platform and overall density. With the transaction, PFG will add an additional five state-of-the-art broadline distribution facilities with excess capacity for further growth across four Southeastern states.
- Complementary Customer-Centric Operating Models: Consistent go-to-market approaches and selling cultures are focused on customer success. Cheney Brothers provides food & foodservice to a diverse range of customers including independent restaurants, restaurant chains, hotels, country clubs, institutional groups and other foodservice operators.
- Compelling Private Brand Opportunity: Cheney Brothers has a high mix of sales to independent restaurants but a low mix of private brand penetration to independent restaurants. PFG has a meaningful opportunity to expand the sale of private brands to Cheney Brothers independent restaurant customers by leveraging PFG’s broad portfolio of private brands.
- Sizable Synergy Opportunities: PFG expects to achieve approximately $50 million of annual run-rate synergies by the third full fiscal year following closing. Identified cost synergies are primarily in the areas of procurement, operations and logistics and are expected to be achieved within the first three full fiscal years.
- Compelling Financial Impact: The transaction is expected to be accretive to PFG’s Foodservice and total company top-line revenue growth rate and adjusted EBITDA margins. Furthermore, the transaction is anticipated to be accretive to Adjusted Diluted EPS by the end of the first full fiscal year, including year 1 synergies.
- Attractive Valuation: The purchase price reflects a multiple of 13.0x to Cheney Brothers’ unaudited Trailing 12 month Adjusted EBITDA. Including the expected $50 million of run rate synergies, the purchase price reflects a 9.9x multiple.
The $2.1 billion purchase price is expected to be financed with borrowing on the company’s ABL facility and new Senior Unsecured Notes. The transaction, which has been approved by the board of directors of PFG, is subject to U.S. federal antitrust clearance and other customary closing conditions and is expected to close in calendar 2025. The transaction is not subject to PFG shareholder approval.
