Sysco to Acquire European Food Distributor Brakes From Bainby
Sysco Corp. agreed to buy food-service distributor Brakes Group from private equity firm Bain Capital in a $3.1 billion deal, including $2.3 billion in debt, giving the company a bigger foothold in Europe.
Brakes had sales of about $5 billion last year, and the combined company will generate roughly $55 billion, Houston-based Sysco said in a statement Monday. The acquisition is slated to be completed before the end of Sysco’s fiscal year in July.
Sysco, the largest North American food-service distributor, is looking to Europe for growth after a failed attempt to buy domestic competitor US Foods for $3.5 billion last year. That deal was blocked by a federal judge, who said a merger of the food-distribution giants would probably reduce competition and raise prices for hotels and restaurants.
Investors reacted coolly to the latest acquisition, which will add to Sysco’s debt load. Its shares fell 4.9 percent to close at $42.79 in New York, the biggest single-day drop since August 2013. The shares had gained 9.7 percent this year through last week.
Brakes, based in London, has 15,000 employees and operations in the U.K., Ireland, France, Spain and other European countries.
US Foods, meanwhile, is seeking to raise about $1 billion in an initial public offering, people familiar with the matter said earlier this month.