Performance Food Group (PFG) recently agreed to acquire Riviera Beach, Florida-based foodservice distributor Cheney Brothers for $2.1 billion in cash in a deal PFG says strengthens its presence in the Southeast.
Cheney, founded in 1925, generates approximately $3.2 billion in annual revenue.
The transaction is expected to close in 2025, PFG reported.
“Cheney Brothers will be an outstanding addition to our foodservice segment, and we are excited to welcome their many talented associates to the PFG family of companies,” George Holm, PFG chairman and CEO, said in a news release. “This acquisition will expand and enhance our offerings to a high-quality and diverse customer base.
“We have long admired the success of Cheney Brothers in the Southeastern U.S. and believe that the combination of our organizations will push the business to new heights. We are excited for what the future holds for the newest addition to PFG.”
The addition delivers multiple strategic and financial benefits, PFG said, including:
- Expanded geographic reach: The addition of Cheney’s distribution footprint in key geographies enhances PFG’s existing distribution platform and overall density. With the transaction, PFG will add an additional five broadline distribution facilities with excess capacity for further growth across four Southeastern states.
- Complementary customer-centric operating models: Consistent go-to-market approaches and selling cultures are focused on customer success. Cheney provides food and foodservice to a range of customers, including independent restaurants, restaurant chains, hotels, country clubs, institutional groups, and other foodservice operators.
- Compelling private-brand opportunity: Cheney has a high mix of sales to independent restaurants but a low mix of private-brand penetration to independent restaurants. PFG has an opportunity to expand the sale of private brands to Cheney’s independent restaurant customers by leveraging PFG’s portfolio of private brands.
- Sizable synergy opportunities: PFG expects to achieve approximately $50 million of annual run-rate synergies by the third full fiscal year following closing. Identified cost synergies are primarily in the areas of procurement, operations, and logistics; and are expected to be achieved within the first three full fiscal years.
- Positive financial impact: The transaction is expected to be accretive to PFG’s foodservice and total company top-line revenue growth rate and adjusted EBITDA margins.
- Attractive valuation: The purchase price reflects a multiple of 13x to Cheney’s unaudited, trailing-twelve-months Adjusted EBITDA.
“On behalf of the 3,600 Cheney Brothers associates, allow me to express our excitement at the prospect of being part of PFG’s organization,” Cheney CEO Byron Russell said. “I have watched PFG grow into one of the country’s largest foodservice distributors by fostering new business relationships and maintaining a strong company culture. I believe this transaction will bring together two winning organizations and create a significant platform for growth.
“Together, the companies will build upon each other’s strengths and achieve outstanding success in the years ahead.”
