Performance Food Group Company Acquires Cheney Bros, Inc.
Richmond, Virginia – Performance Food Group Company (PFG) (NYSE:PFGC) has successfully completed its acquisition of Cheney Bros., Inc., a significant player in the independent broadline foodservice distribution arena. This strategic move aims to bolster PFG’s operational capabilities in the Southeast, thereby expanding its distribution network. With Cheney Brothers, which boasts annual revenues of around $3.2 billion and employs approximately 3,600 individuals across five distribution hubs, PFG is well-positioned for growth.
PFG's Vision for the Future
“We are thrilled to finalize this acquisition and are eager to welcome the dedicated professionals from Cheney into the PFG family,” commented George Holm, Chairman & CEO of PFG. This acquisition not only strengthens PFG’s existing business model but also enhances its geographic reach to benefit a diverse array of customers. Holm extended his gratitude to Byron Russell, CEO of Cheney Brothers, recognizing his commendable leadership over the past four decades. “Thanks to his guidance, Cheney Brothers has flourished, establishing itself as a leading force in the foodservice distribution sector.”
Strategic Advantages of the Acquisition
Enhanced Distribution Infrastructure
One of the primary advantages of this acquisition is PFG's expanded geographic footprint. The integration of Cheney Brothers' distribution facilities will significantly enhance PFG’s capacity and efficiency, offering state-of-the-art distribution capabilities across four Southeastern states. This addition equips PFG with the infrastructure necessary for future growth.
Shared Customer Success Principles
PFG and Cheney Brothers share a commitment to customer-centric approaches. The acquisitions are set to improve the quality of service provided to a broad clientele, including independent restaurants, large chains, hotels, and other foodservice operators, thereby facilitating mutual growth opportunities.
Private Brand Expansion Potential
The acquisition presents a unique opportunity for PFG in terms of expanding its private brand offerings. Cheney Brothers typically has a smaller market share of private brand products among independent restaurants. Through this acquisition, PFG can leverage its extensive range of private brands, optimizing revenue and market share.
Synergies and Financial Benefits
PFG anticipates around $50 million in annual run-rate cost synergies by the third full fiscal year post-acquisition. Cost-saving measures will focus on procurement, logistics, and operational efficiencies, ensuring that the combined entity can operate more effectively and profitably. This acquisition is also projected to strengthen PFG’s Foodservice segment, driving revenue growth and improving adjusted EBITDA margins.
Fiscal Year 2025 Expectations
Looking ahead to fiscal year 2025, PFG has adjusted its expectations for net sales to fall between $62.5 billion and $63.5 billion. This represents a notable increase from previous projections of approximately $60 billion to $61 billion. Furthermore, adjusted EBITDA for the same period is expected to range from $1.7 billion to $1.8 billion, showcasing a positive outlook for the company’s financial performance.
About Performance Food Group Company
Performance Food Group stands as an industry leader in food and foodservice distribution across North America, operating from over 150 locations. Headquartered in Richmond, Virginia, PFG delivers quality products to more than 300,000 venues, including restaurants, corporations, schools, health facilities, and retail outlets. The commitment of PFG’s approximately 37,000 associates enables the organization to build enduring relationships with customers, suppliers, and communities, establishing its reputation as a Fortune 100 company.
Frequently Asked Questions
What is the significance of the Cheney Brothers acquisition?
The acquisition allows PFG to enhance its distribution capabilities in the Southeast and strengthen its market position significantly.
What are the expected financial benefits from this acquisition?
PFG anticipates achieving around $50 million in annual run-rate cost synergies and improved revenue growth across its segments.
How does this impact PFG’s customer base?
This move enhances PFG's ability to serve a diverse array of customers more effectively, including independent and chain restaurants.
What does the future look like for PFG post-acquisition?
PFG is looking forward to leveraging its expanded footprint to drive future growth and improve its financial outcomes for fiscal year 2025 and beyond.
Where can I find more information about PFG?
For more insights about Performance Food Group and its offerings, you can visit their official website at pfgc.com.
