Performance Food Group to Acquire Reinhart Foodservice

Deal would make it one of the largest foodservice distributors in the U.S.
Photograph courtesy of PFG

RICHMOND, Va. — Performance Food Group (PFG) has acquired fellow distributor Reinhart Foodservice in a $2 billion deal that promises to make PFG one of the largest national distributors in the United States, PFG said.

The deal combines the country’s third- and fifth-largest foodservice distributors. Richmond, Va.-based PFG is No. 3 behind Sysco and U.S. Foods, according to data from CSP’s sister research firm, Technomic, while Reinhart, Rosemont, Ill., is No. 5, and the second-largest privately held distributor in the country. Reinhart generates more than $6 billion in net sales, which would give PFG about $30 billion in net sales, the company said.

“The addition of Reinhart and its complementary strengths will expand Performance Foodservice’s broadline presence, improve our network efficiency and help us achieve our long-term goals,” George Holm, CEO of PFG, said in a conference call discussing the deal.

Holm said the deal “provides us with greater overall scale, a diverse but similar customer base, including a solid base of independent customers with little overlap.”

Reinhart was established in 1972 and has been owned by Reyes Holdings since 2005, a period in which the distributor grew to $6 billion in sales from $1.6 billion. Holm said that PFG and Reyes have been talking about a transaction “for many years now.”

“Now is the right time for both parties,” Holm said.

Reinhart has 26 distribution centers and 42,500 customers and employs 5,600 people. Its biggest chain customers include Burger King, Subway and Five Guys. Holm said PFG also does business with Burger King and Subway in some markets.

The deal is subject to regulatory approvals. PFG said it expects to see about $50 million in “cost synergies” by the third year following completion of the merger. Most of those will come in operations, procurement and logistics.

The agreement also promises to solidify PFG’s status as a major, national distributor and would put it within arm’s reach of US Foods, the second-largest distributor in the United States, according to the Technomic Power 50 report.

“This really closes the gap between them and the current No. 2 US Foods,” said David Henkes, senior principal for Technomic.

Holm said the company doesn’t add a “significant amount of geography” with the acquisition, though it has no plans to reduce the number of distribution centers “at this point.” But he said the deal gets PFG “closer to the customer” with better delivery service.

“You’re not running your fleet as many miles,” he said. “Probably not running your salespeople as many miles either. We’ve always found those to be good things in the business.”

This marks the second acquisition in three months for PFG. In March, the company acquired the Eby-Brown Co. LLC, a leading U.S. distributor of prepackaged candy, snacks, specialty beverages and tobacco products in the convenience-store industry. The deal, set to close this summer, will allow PFG’s Vistar segment to strategically expand in the c-store channel where there is significant overlap with suppliers and product categories, as well as opportunities to use PFG brands for unique solutions in the prepared/made-to-order foodservice market, PFG said at the time of the purchase. Vistar is a national wholesale distributor in industries such as vending and office coffee service, retail, theater and concessions, hospitality, campus retail, office supply and corrections.

A version of this story appeared originally on CSP’s sister brand, Restaurant Business.

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