HOUSTON: As food distributor Sysco plans to acquire rival US Foods, both companies are working with Brunswick Group for external PR counsel.
The terms of the deal, announced Sunday, have Sysco paying $3.5 billion for US Foods and assuming $4.7 billion of the company's net debt. The deal is expected to close in the third quarter of next year.
“With the agreement to merge Sysco and US Foods, we are looking to bring together the best of both companies,” said Charley Wilson, Sysco's VP of corporate communications. “As we move through the integration process, we will have more details on the combined company, including staffing issues.”
Sysco has no immediate plans for layoffs. However, in a statement, the company said part of the $600 million it expects to achieve over the next four years would be attributed to eliminating “overlapping general and administrative functions.”
The acquisition could face a tough review from the Federal Trade Commission, according to MarketWatch.
Brunswick declined to comment on the deal or communications efforts associated with it.
A spokesperson from US Foods was not immediately available for comment.
Private-equity firms Clayton, Dubilier & Rice and Kohlberg Kravis Roberts bought US Foods in May 2007 from Royal Ahold for $7.1 billion. The two firms will reap a gain of 55% on their equity investment, according to reports.
With $22 billion in annual revenue, US Foods employs about 24,000 people at 60 sites across the country. Meanwhile, Sysco staffs 48,000.
Sysco reported net income of $285.6 million, down slightly from the previous year, in the quarter ending September 28. It earned $11.7 billion in revenue, up from $11.1 billion in the same period of 2012.