US Foods to Buy SGA’s Food Group for $1.8 billion

US Foods is expanding its presence across the Northwest region with a deal to buy Services Group of America five operating companies collectively known as SGA’s Food Group of Companies, for $1.8 billion in cash.

SGA’s Food Group of Companies, based in Scottsdale, Arizona, has combined 2017 net sales of $3.2 billion and approximately 3,400 employees. Its five separate companies are:

  • Food Services of America, Inc. (FSA): One of the largest regional broadline distribution companies in the U.S. serving 16 states in the West and Midwest from nine distribution centers; 75% of net sales;
  • Systems Services of America, Inc. (SSA): Multi-unit distribution foodservice company specializing in distribution to casual and fast casual dining establishments and regional and national QSR chains; 21% of net sales;
  • Amerifresh, Inc.: Strong produce sourcing and marketing capabilities, 2% of net sales;
  • Ameristar Meats, Inc.: Provider of custom meat products, including 18 different beef programs to meet customer specifications; 1% of net sales;
  • GAMPAC Express, Inc: Supply chain planning and logistics; 1% of net sales.

In total, SGA’s Food Group of Companies has approximately 33,000 customers, 12 distribution centers and more than 20 private brands.

“This acquisition will significantly increase US Foods’ reach across key markets in the attractive and growing Northwest region of the U.S. and adds one of the most well-regarded regional distributors to our company,” said US Foods Chairman and CEO Pietro Satriano.

US Foods will finance the acquisition primarily with $1.5 billion in fully committed term loan financing from J.P. Morgan and Bank of America Merrill Lynch and will fund the balance of the purchase price through its existing liquidity resources, according to a press release.

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US Foods is a foodservice distributor with 25,000 employees and more than 60 locations, works with approximately 250,000 restaurants and foodservice operators. It provides its customers a broad and innovative food offering and a comprehensive suite of e-commerce, technology and business solutions.

“For the past 46 years, we have had the vision to become a leading national foodservice company. This is an exciting milestone on our journey and provides more success and growth opportunities for our customers and our Associates,” said SGA’s Food Group of Companies Executive Vice President and COO Slade Stewart.

Information provided by Business Wire.