US Foods Acquires Smart Foodservice for $970 Million
ROSEMONT, IL - I like to think of foodservice as a snowball rolling downhill—indefinitely. This force of nature continues to gain speed and weight as it acquires new resources to bulk up. The foodservice heavyweight US Foods is rolling down the ski slope at lightning speed, today announcing that it has entered into a definitive agreement to acquire Smart Foodservice Warehouse Stores from funds managed by affiliates of Apollo Global Management, Inc. for $970 million in cash.
“As we continue to expand our multi-channel strategy, we know customers, particularly independent restaurants, increasingly use cash and carry as a convenient, cost-effective purchasing option,” said US Foods Chairman and CEO Pietro Satriano. “With an established footprint and a consistent record of profitable growth, Smart Foodservice will complement our CHEF’STORE cash and carry model and provide a platform to significantly accelerate our presence in this attractive, growing channel.”
Smart Foodservice operates 70 small-format cash and carry stores across California, Washington, Oregon, Idaho, Nevada, Utah, and Montana, that serve small and mid-sized restaurants and other food business customers with a broad assortment of products. Founded in 1955 and headquartered in the greater Portland, Oregon area, Smart Foodservice employs approximately 900 associates. Smart Foodservice had 2019 revenues of approximately $1.1 billion and approximately $85 million in Adjusted EBITDA (including standalone cost estimates).
“The management team at Smart Foodservice very much looks forward to working with the team at US Foods in accelerating our growth in the attractive cash and carry foodservice market,” Derek Jones, President of Smart Foodservice, commented. “US Foods is an ideal partner for Smart Foodservice and we are excited about the synergistic and strategic benefits of the combination.”
According to a press release, US Foods sees higher case volume growth with customers who place delivered orders and purchase through existing CHEF’STORE cash and carry locations. Smart Foodservice brings a strong record of profitable growth and US Foods is well positioned to continue to expand its small store model into new markets. This acquisition will complement the company’s existing CHEF’STORE cash and carry model.
“We are pleased that Smart Foodservice will be able to thrive with a strong complementary partner in US Foods,” Andrew Jhawar, Senior Partner of Apollo and Head of the Consumer & Retail Industry Group, added. “We would like to thank Derek Jones and all of the employees at Smart Foodservice for their dedication in building a highly differentiated business in the cash and carry industry, and we know the company will be in great hands with its new owners.”
To read the full financial details of this acquisition, click here. And, as always, keep coming back to ANUK as we cover the snowball effect that shapes our industry’s acquisitions.