As a means to expand and fortify its presence in Europe, major U.S. food distributor Sysco Corp. plans to purchase London-based food enterprise Brakes Group from Bain Capital Private Equity to the tune of USD 3.1 billion (EUR 2.8 billion).
At the other end of the transaction, the Brakes Group will operate as a standalone company within Sysco, continuing to serve its established regions including the United Kingdom, Ireland, France, Sweden, Spain, Belgium and Luxembourg. The price tag Sysco intends to pay for the Brakes Group includes a repayment of the latter company’s USD 2.3 billion (EUR 2.08 billion) debt.
Bain Capital acquired Brakes in 2007, paying EUR 1.3 billion (USD 1.83 billion) for the company. When combined, Brakes Group and Sysco are expected to pull in around USD 55 billion (EUR 49.9 billion) in annualized sales.
"This transaction will unite Sysco with a leading foodservice distributor in Europe with demonstrated capability to sustainably grow its business over time," said Sysco CEO Bill DeLaney of the purchase in the new release.
The Brakes buy comes on the heels of attempts made last year by Sysco to purchase a rival company, US Foods, for USD 3.5 billion (EUR 3.17 billion); however, the Federal Trade Commission won a lawsuit blocking the deal after an 18-month pursuit. Sysco funneled USD 355 million (EUR 322.3 million) in preparation costs for the failed transaction, and spent an additional USD 312 million (EUR 283.3 million) in break-up fees.
The companies hope that the current sale will be wrapped by July 2016. Key members of the Brakes Group leadership team will remain with the company, including CEO Ken McMeikan. The company’s employee base and management core will also stay intact, according to Sysco.
Sysco currently distributes food to restaurants, schools, hospitals and other institutions in market areas such as Canada, Ireland, Northern Ireland, the Bahamas, the United States, Mexico and Costa Rica.
