Performance Food Group acquires Core-Mark
Images courtesy of Performance Food Group
Performance Food Group (PFG) continues to develop its activities outside the restaurant industry.
The Richmond, Va.-Based broad-line distributor on Tuesday announced an agreement to buy Core-Mark for a combination of cash and stocks. The deal is valued at $ 2.5 billion, including assumed debt.
The agreement is designed to create a “premier convenience business”, combining PFG’s Vistar segment with the Core-Mark and Eby-Brown businesses of Naperville, Illinois. The convenience business will operate under the Core-Mark brand and will be headquartered in Westlake, Tex.
PFG CEO George Holm called Core-Mark “an exceptional company that we believe will significantly enhance our diversification of business and our expansion into the convenience store channel.”
He said the deal “has strong strategic and financial advantages” that “will generate significant benefits for customers.” He said the two organizations had “similar cultures, which we hope will facilitate a smooth integration and transition process.”
It’s also a sign that distributors who primarily served restaurants are still looking to diversify, even amid signs of an industry recovery.
Distributors had been planning to diversify their businesses for some time, but it intensified a year ago when many lost a lot of business as restaurants were forced to close dining rooms to prevent the spread. of COVID-19. Many businesses have started looking at retailers, including grocers and convenience stores, to hedge their bets. Others have started delivering pantry supplies to consumers’ homes.
For a company like PFG, which competes with two bigger rivals of Sysco and US Foods, the c-store business offers another growth opportunity. The company first broke into the business in 2019 with its acquisition of Eby-Brown. Core-Mark is one of this company’s largest wholesale distributors, with approximately $ 17 billion in net sales and 32 distribution centers.
“The addition of convenience store distribution in 2019 has strengthened the core strength of our organization, providing another avenue for growth,” said Patrick Hagerty, CEO of Vistar, in a statement.